The Asian Development Bank (ADB) has revised Samoa's economic growth for 2023 and 2024 largely due to a rebound by the local tourism sector.

In a presentation at the Central Bank of Samoa (CBS) in Apia on Friday – of the regional development bank's Asian Development Outlook September 2023 report – the ADB Chief Economist Albert Park attributed the positive growth forecast to the high tourism numbers in Samoa.

Consequently, Samoa’s economy is forecast to have grown by 6.0 per cent in the 2023 financial year with the upward trend expected to moderate to 4.2 per cent in the 2024 financial year (ending  June 2024).

However, the country's current labour shortage crisis was not lost on Mr. Park, who cautioned that its effects could "drag on" if not resolved soon. 

“Despite Samoa’s tourism rebound, labour constraints are becoming increasingly prominent and may be a drag on future growth if not mitigated,” said the ADB Chief Economist. “Interventions to support growth may include skills training, immigration, and labour force participation.”

Generally, the outlook for the Pacific subregion has also been revised up from the projections in April this year with growth now projected to be 3.5 per cent in 2023 and 2.9 per cent in 2024, according to the ADB report. 

The impact of the seasonal workers schemes, which has seen close to 6,000 Samoans travel to either Australia or New Zealand as part of labour mobility programmes, was also discussed during a panel discussion at the CBS conference room. 

According to the Manila-based regional development bank, labour turnover has been significant, especially in tourism services, and continued growth in labour participation as well as attracting former residents and overseas workers back to the domestic market will be needed to boost growth in Samoa.

Nonetheless, the ADB report said tourism continues to rally in 2023 as visitor arrivals recover to near pre-pandemic levels with this momentum also forecast to continue into 2024. The construction, commerce, and services sectors will receive an additional lift from the increased mobilization of public spending, added the report.   

The ADB report also noted that inflation is a growing challenge for the country due to domestic and import price pressures. Average inflation was 12.0 per cent for the 2023 financial year, based on the revised projections quoted in the report, though economist and senior National University of Samoa (NUS) lecturer, Afualo Dr Wood Salele is of the view that the inflation rate is higher. However, based on its projections, the ADB report said inflation is expected to moderate to 5.3 per cent in the 2024 financial year, which is a higher rate than previously forecast.

The panel discussion, following the launching of the ADB report, included Seve Benjamin Pereira, Assistant Governor Policy Group for the Samoa Central Bank, ADB Chief Economist Mr. Park, Seulupe Michelle Macdonald, British American Tobacco Samoa Ltd General Manager and President of the Samoa Chamber of Commerce, ADB Principal Economist Ashish Narain, and the NUS academic Afualo.