Samoa's G.D.P. in seventh straight decline

By Adel Fruean 05 October 2021, 10:00AM

Samoa’s gross domestic product (G.D.P.) declined by 1.8 per cent in the June 2021 quarter when compared to the same period last year, a Samoa Bureau of Statistics report shows.

The seventh straight quarterly decline brings the nation's economy well past the official point of an economic recession.

The country's economic woes were highlighted in a recent report titled: “Gross Domestic Product” for the June 2021 quarter produced by the bureau.

The total G.D.P. recorded in real terms for the sector stands at about $461 million. However, the decline in the quarter under review makes it the seventh quarterly decline for the economy which started in December 2019.

The economic definition of a recession is two or more quarters of consecutive contraction in economic growth, while a depression is described as a more prolonged period of reduction in economic output lasting years.  

The contraction of the economy comes on the back of revised growth rates of -7.8 per cent and -6.8 per cent in the December 2020 and March 2021 quarters respectively. 

According to the report, the economy continues to decline due to the impact of the COVID-19 pandemic, affecting economic activity within the June 2021 quarter in terms of international travel restrictions, reduced trade, global control measures and national lockdown. 

“The pandemic has directly affected most sectors of the economy with wholesaling activities, travel and tour related activities, manufacturing, construction, air and land transport and financial services being the hardest hit,” reads the report. 

Furthermore, the -1.8 per cent growth in the June 2021 quarter reflects an easing of some restrictions as initially enforced by the Government during lockdown.

For the goods-producing industries, it declined by 7.2 per cent while services industries went down by 2.6 per cent in the June 2021 quarter.

“Primary industries which make up approximately 10.6 per cent of the economy increased by 12.6 per cent," reads the report.

The financial services industry was the main contributor to the decline in G.D.P. as it went down in the June 2021 quarter following three quarterly declines starting during the September 2020 quarter. 

“Financial services provided via commercial banks and non-financial institutions recorded reverse growths of 30.8 per cent and 17.3 per cent respectively.

“The Commerce industry also contributed a –0.9 per cent decline in the total GDP growth for the period under review.

“Wholesaling activities related to food, beverages, construction materials and gaseous products decreased in June 2021. Business services also went down as tour operators and travel oriented businesses declined; demand on real estate services also plunged during this period.”

Although, legal and consultancy services increased during the quarter, it was not high enough to offset the negative effect its counterparts have experienced.

The industries that recorded positive growths were communication, fishing, agriculture, accommodation and restaurants, personal and other services, public administration and food and beverage manufacturing.

“The overall increase by these six industries was not high enough to offset the decline by the industries recording negative growths in June 2021," the report found. 

By Adel Fruean 05 October 2021, 10:00AM

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