The International Monetary Fund (IMF) Executive Board has concluded its 2024 Article IV consultation with Samoa, as announced on January 31, 2025. The Board endorsed the staff appraisal without a meeting on a lapse-of-time basis.
Samoa's economy has shown significant recovery following a contraction during the pandemic. GDP growth reached 9.2 percent in FY2023 and increased to 9.4 percent in FY2024, largely due to a rebound in tourism. Inflation decreased from double-digit levels in FY2023 to 2.9 percent year-on-year by October 2024. The fiscal surplus rose to 10.1 percent of GDP in FY2024, aided by strong grant flows and tax revenues alongside controlled expenditures.
For FY2025, GDP growth is projected at 5.5 percent, driven by public investment and preparations for the Commonwealth Heads of Government Meeting (CHOGM). However, growth is expected to slow to around 2 percent over the medium term amid global uncertainties and inflation pressures.
The IMF Executive Directors noted that Samoa's economic outlook remains favorable in the near term but warned of downside risks such as potential slowdowns among key trading partners and inflation pressures from domestic and external sources.
"Samoa’s recent policy mix has helped build significant economic buffers but has also presented challenges," stated the IMF report. It highlighted that while large fiscal surpluses have improved debt dynamics, low capital spending could undermine productive capacity.
An expansionary fiscal stance is recommended to support economic activity while addressing capacity constraints for public investment projects, including those related to climate change.
Monetary policy normalization should continue with an aim to guide interest rates higher while maintaining the exchange rate peg as a nominal anchor. Reducing excess liquidity and strengthening financial supervision are also advised.
The IMF emphasized that overcoming structural challenges requires reforms focused on attracting foreign investment, reducing trade costs, and enhancing human capital.