Traditionally, when Samoa hosts a sharp influx of visitors its economy has a burst of growth.

In 2015, real GDP grew 6.2% on the Commonwealth Youth Games and the first rugby match between the All Blacks and Manu Samoa.

In 2019, Samoa hosted the Pacific Games, and GDP grew 6.3% in Q3, bringing the throughthe-year growth to 5.4%. As one-off-event-related visitor numbers drop off, growth tends to ease. The pandemic resulted in back-to-back recessions in 2020 and 2021. GDP was flat in 2022, as Samoa only opened its borders on 1 August that year.

Last year, GDP rebounded 10.2% driven by net exports (mainly tourism) and robust consumer demand. The latter was boosted by household disposable income growth due to people returning to jobs in the tourism sector as well as strong remittances. Net exports was the standout performer, though, driven by services exports (tourism).

Inbound demand was strong, with 174,967 visitors to Samoa in 2023 (97% of the 2019 record of 180,858). Visitor arrivals benefitted from events such as the 2023 World Regatta Championship, Teuila Festival, Church Conferences and November’s historic signing of the Samoa Agreement between the European Union and the African Caribbean Pacific Countries.

That momentum was carried into 2024, with short-term arrivals for the first four months at 48,306, up 10.1% y/y. In October 2024, Samoa hosts the Commonwealth Heads of Government Meeting (CHOGM), which will likely be the largest and most significant event in its nearly 62 years since independence. We are forecasting GDP to grow by 7.4% in 2024 before easing slightly to 6.8% in 2025.

Activity next year is expected to be driven by a ramp-up of work on private sector projects and stimulus spending related to the country’s 2026 general election. The stage is set for Samoa to consider normalising its policy settings.

The Central Bank of Samoa has already indicated it will shift policy from its current accommodative stance to neutral. Hence, the official policy rate is expected to rise to 2-3% over the next two years. And liquidity may support delivery of that rate. The government wants to reduce its deficits over the forward estimates, when the private sector is expected to take a more dominant role in driving activity.

Kishti Sen and Tom Kenny are economists for the ANZ Bank. This is part of their research titled Samoa Coming Together.