Samoa's recovery from the COVID-19 pandemic is on track with data released by the Central Bank of Samoa (CBS) showing growth in various economic sectors.

The CBS Board met last Thursday to discuss and set an appropriate monetary policy stance for the fiscal year 2023/2024 and acknowledged the strong growth since Samoa reopened its borders in August last year.

"Annual Real GDP growth is presently around 3.2 per cent at the end of March 2023 and is expected to be around 6.5 per cent by June 2023," reads a media release issued by CBS on Friday. "The source of this robust recovery comes from strong expansions in sectors such as commerce, business services, personal and other services, accommodation and restaurants and transport services.

"In addition, visitor earnings, remittances and exports of goods receipts have increased significantly in FY 2022/2023, adding to the strong economic recovery so far."

Due to the strong economic growth, the financial sector regulator said the country’s gross foreign reserves have jumped by 35.1 per cent to a record $1,098.3 million or $1.10 billion. This is equivalent to 11.1 months of import cover at the end of June 2023, given the significant inflow of Government grants and budget support from its development partners during the year.

In terms of the financial conditions, the CBS said total liquidity of the banking system remains high, recording its highest level yet of $575.4 million at end of June 2023 while interest rates continue to remain relatively low in FY 2022/2023.

"However, total lending of both commercial banks and non-bank financial institutions continues to slow down despite the strong growth in the economy as financial institutions remain cautious and continue to prioritise consolidation of existing loans following the COVID-19 lockdowns."

And due to the country's rapid economic recovery, the local demand for goods and services has risen steadily since the reopening of borders, with many local agricultural goods at the produce and fish market recording large price hikes in the past 7 months.

"In particular, local price inflation has risen from 3.9 per cent in June 2022 to 9.2 per cent in June 2023. While imported price inflation has also increased from 13.6 per cent to 14.5 per cent in June 2023, it is currently slowing down since March 2023. Overall, the headline inflation rate rose from 8.8 per cent last year to 12.0 per cent at the end of June 2023."

On the global front, CBS said the world economy is expected to expand by 3.0 per cent in 2023, which is down from 3.5 per cent in 2022 according to the July 2023 World Economic Outlook by the International Monetary Fund (IMF). Weighing global economic activities is the subsequent impact of the increases in central bank policy interest rates over the past year to address the high inflation rates around the world.