Economy of Samoa

KEY FACTS 2015

GNI: US$759 million

GNI p.c.: US$3,930

GDP growth: 1.6% p.a. 2011–15

Inflation: 0.7% p.a. 2011–15

In addition to remittances from Samoans living overseas, mainly in New Zealand, the economy relies heavily on subsistence agriculture, with cash crops, notably coconut, grown for export. It is therefore vulnerable to natural hazards, such as cyclones and crop diseases, and to fluctuations in world prices for commodities. GDP grew by 0.4 per cent p.a. 1979–89.

There was serious cyclone damage in 1990, 1991 and 1998, when the coconut and banana crops were devastated. Compounding the problem was the taro leaf blight in 1993, which led to a further drop in agricultural output and exports. These setbacks resulted in fluctuating and often negative annual growth.

However, Samoa was early to embark on structural reforms and throughout the 1990s the government was controlling public-sector costs, encouraging diversification to reduce reliance on the agricultural sector and pursuing a programme of privatisation. These policies led to enhanced growth from the latter 1990s. Fisheries were developed, new manufacturing enterprises emerged and an offshore financial sector launched. Tourist numbers increased steadily.

Overall, the economy staged a remarkable recovery, showing generally good growth from 1995. But it remained vulnerable to natural disasters and international downturns, which have caused pauses in growth and rapid rises in inflation. In 2008–09 this generally good growth was interrupted both by the global economic downturn and then, in September 2009, by the devastating tsunami, causing the economy to contract by 4.8 per cent in 2009, before recovering in 2010–15.

Fisheries

Since the mid-1990s there has been substantial growth in offshore fishing, the use of fish aggregating devices and fish farming. Fish and fish products are the major exports.