Asia Development Bank, Pacific Economic Monitor –a report released this week titled COVID-19 and the Pacific Three Years On notes that Samoa should see an increase in economic growth in its recovery from the COVID-19 pandemic.
The report says the GDP growth in the Pacific is projected at 3.3% in 2023 and 2.8% in 2024, sustaining the subregion’s rebound from COVID-19. Tourism-driven economies such as Samoa also benefit from lifting travel restrictions and increased public investment spending.
Downside risks weigh the outlook for the subregion. In the short term, inflation remains persistent albeit declining, and many economies are sensitive to international commodity price shocks.
There is uncertainty about the pace of the resumption of stalled projects and an expected uneven recovery in tourism exacerbated by possible economic scarring from the pandemic.
During the border closures in 2021, almost half (48%) of all tourism workers in Samoa were laid off, with an additional 21% subject to reduced hours.
The reopening of borders has enabled travelers to return, allowing Samoan workers to pursue work opportunities abroad. Combined with workers moving to other service sectors of the economy, total employment in accommodation fell 60.7% during 2019−2022 to just 594 workers.
Most other sectors of the economy retained or increased their employment levels. By the third quarter (Q3) of FY2023, employment in the accommodation sector had grown to 842 workers, 44.8% below the pre-COVID-19 level, despite the increase in visitor arrivals. Consultations with private sector peak bodies suggest that vacancies are widespread, with one larger accommodator reporting staff turnover approaching 80% of total workers and months-long challenges in filling vacant positions.