With its high dependency on tourism and agriculture, the Samoan economy is severely affected by natural disasters. In December 2012, Tropical Cyclone Evan is estimated to have caused damage of more than S$400 million (US$170m), according to Prime Minister Tuilaepa Sailele Malielegaoi, destroying tourism infrastructure and farmlands.
The effect on the economy was disastrous: it contracted by half a percentage point in the financial year ended June 2013, according to the Central Bank of Samoa. A six per cent drop in tourist numbers and receipts and an estimated three per cent decrease in agricultural output are believed to have driven that contraction in the economy. Not long before the 2009 tsunami had a similar devastating effect on the economy.
The financial year ended June 2014 has brought positive but modest growth. Slightly below the estimated two per cent, the economy registered 1.8 per cent.
The Central Bank expects the country to build on this positive growth forecasting 2.5 per cent in 2015 to stabilise between 2.2 and 2.5 per cent in the three following years. Replanting activity has been growing vigorously helping the agricultural produce sector get back on its feet. Reconstruction and refurbishment of damaged tourism properties as well as a couple of major new development projects are also providing a lifeline to economic growth.
“Foreign exchange reserves are at a healthy 5 months worth of imports,” says Benjamin Pereira, Assistant Governor of the Central Bank of Samoa. “The Samoa National Provident Fund has S$ 511million (US$216.507m) in assets with nearly S$67 million (US$28.387m) liquid,” says Karras Lui, Economic Manager at the Central Bank.
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