Central Bank Governor optimistic
The Governor of the Central Bank of Samoa, Maiava Atalina Ainu'u-Enari is optimistic that Samoa’s growth rate may improve on an earlier prediction that the economy would contract -6.6 per cent by December.
The optimism is based around reports that in the second quarter of the year, remittances grew by $11.05 million. This should help soften the blow from the lack of tourism, Governor Maiava Atalina Ainuu-Enari said.
This is partly due to the growth in remittances, grant funds injected into the budget and fiscal relief programmes by the Ministry of Finance.
“For the growth of end December 2020, we will be in a better position to provide a revised projection once the June 2020 quarter real growth rate is available,” Maiava said.
“The real gross domestic product or the total value added of all goods and services produced in Samoa in the last twelve months to [the end of] March 2020 was $2,033.27 million and it was growing at 0.7 percent.”
This a drop on 2019’s growth rate of 2.3 per cent, which was driven by marked increases in tourism and exports, including the hosting of the 2019 Pacific Games.
Remittances, the flow of money from overseas to Samoa, hit $146.78 million in June, up $11.05 million from the quarter ending in March.
Compared to last year, remittances are up by $26.42 million, or 4.9 per cent.
This month the Asian Development Bank predicted remittance flows across the Asia Pacific region will free fall due to rampant unemployment and reduced wages.
A.D.B. predicts the annual remittances flow of around US$315 billion (T$829.5 billion) will fall by nearly 20 per cent.
However, remittance activity from the Middle East and United States account for the majority of this, with 41.4 per cent of remittance loss in the region coming from the Middle East and 37.9 per cent from the U.S.A.
To deal with this, the A.D.B. suggests remittance service providers be expect from disclosure requirements and recommends those who reduce their remittance fees be given tax incentives.