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Admits tough times ahead with GDP contraction

WELLINGTON, New Zealand (Radio New Zealand International, June 2, 2009) – Samoa’s Minister of Finance, Niko Lee Hang, has admitted in his new financial year budget statement that the country will be facing tough times ahead.

Parliament proceedings are adjourned for the next two weeks before the new 2009/2010 financial year budget is debated in the house.

According to the minister, the country’s Gross Domestic Product or GDP has shown signs of contraction for the first time in over a ten year period.

GDP in the first six months of the current financial year dropped by 7-point-6 percent, compared to the same period in the previous year.

The minister says there was also a slow down in imports which resulted in a fifteen percent downward revision of revenues expected in the next budget.

But remittances expanded four percent and tourist receipts rose fifteen percent in the first nine months of the current financial year.

However the finance minister says remittances are expected to drop due from countries such as Australia, New Zealand and the United States where much of Samoa’s remittances originates.

He also says tourism revenues will decline as a result of the financial crisis on the travel industry.

The finance minister has told parliament that inflation remains a key concern for the government which now hovers around 13 percent, but he says indications are that it is beginning to gradually subside.

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