MOF NOT SHOCKED BY IMPORTED ANALYSIS
By: Nanai Taofiga Laveitiga Tuiletufuga
Samoa’s economy recorded a 3.5% decline over the fiscal year beginning July 1st 2019 to June 30th 2020 attributed directly to the impacts of the measles outbreak of 2019 and the COVID19 pandemic in 2020.
The outturn is based on the preliminary analysis as published by the Samoa Bureau of Statistics which indicate a better position than that predicted by internationally based academics. The analysis which supports the Ministry of Finance’s (MOF) projections for the last fiscal year is in line with an independent assessment done by the International Monetary Fund conducted in April 2020.
“We had forecasted a contraction of the economy at around 3.3% based on our own analysis of the economy’s past performance taking into account the impacts of the COVID19 across the board on top of the lingering effects of the measles outbreak”, says MOF’s Chief Executive Officer, Leasiosiofaasisina Oscar Malielegaoi.
Leasiosiofaasisina noted that while MOF’s forecast was 0.2% better than the actual outturn, the Samoan economy fared well when compared to other small island developing states which have recorded high negative growths with some developed nations recording as low as a 7% decline. He further stated that some Pacific Island countries are anticipated to sustain as low as a 21% negative growth at the end of their respective fiscal years.
The MOF Chief noted that sound and well informed financial planning taking into account worst case scenarios and ensuring prudent risk management has contributed largely to the economy’s ability to quickly adapt and therefore minimizing drastic impacts on both the economy and Samoan citizens.
He acknowledged that Samoa like the rest of the world is experiencing the “harsh reality of COVID 19 and its impact “and as part of Government’s vigilant surveillance, MOF is constantly liaising with its
international stakeholders such as the IMF (International Monetary Fund), World Bank etc. to ensure that any changes to current predictions on the global front can be anticipated.
In April, the IMF Executive Board in approving a US$22.03 Million Disbursement to Samoa to Address the Covid-19 Pandemic acknowledged the Government’s COVID19 response efforts.
The IMF Board in a press statement asserted,
“Samoa has shown resilience to multiple past economic shocks, underpinned by the authorities’ strong commitment to support the economy and financial assistance provided by the international community.
“Samoa was among the first countries in the world to secure its border to protect its citizens. The authorities’ response to the measles outbreak and the global pandemic has well identified the policy priorities, including safeguarding human capital, providing support to the private sector, and maintaining macroeconomic stability. With support provided by external donors, the authorities aim to enhance the country’s preparedness to handle the impact of COVID-19, as well as improving the quality and efficiency of the health care system”.
“The authorities’ policy response also targets assistance to vulnerable businesses and households to ease the impact of the pandemic and safeguard their livelihoods”.
“The financial assistance provided by the IMF will help the authorities maintain macroeconomic stability, thereby supporting the private sector and facilitating international payments for imports, which are needed to provide goods and services to sustain the livelihoods of the people.”
Leasiosiofaasisina says that the sound financial strategy to anticipate the worse-case scenario will ensure that Government can respond to the needs of the country should COVID-19 escalate.
“On the heels of the measles epidemic which the country is still in recovery mode, Samoa was again confronted by the Coronavirus pandemic,” he continued. “And contrary to views questioning the Government’s first $66.3 million tala Stimulus Package now providing immediate and essential relief for our people, we have to plan ahead.”
“We’re not shocked nor surprised with the analysis by` the Samoa Bureau of Statistic in fact we had anticipated the worse,” continued the MOF Chief Executive. “But realistically, the 3.5% economic decline is the end result of decisive financial remedies spearheaded by MOF to inject fresh funds into the local economy through the first $66 million tala Stimulus Package in April.”
For the current fiscal year, MOF is predicting a contraction of 2% taking into account the cushion from the $88 million plus cash injection to stimulate the local economy to ensure that hardships to the local residents will be contained and minimized as best as possible.
And MOF’s vigilance is not going unnoticed.
“Samoa has shown resilience to multiple past economic shocks. The authorities have put together a strong policy package in response to the pandemic, with policy measures aimed to strengthen the health care system, help vulnerable businesses and households, and accommodative monetary policy to ensure liquidity in the financial sector,” complimented IMF’s Tao Zhang, Deputy Managing Director and Acting Board Chairman.
