Samoa’s Inflation Will Get Worse Before It Gets Better

Written by Pio Sioa
Friday, 22 August 2008
The current 6.2% inflation rate lashing Samoan’s economy is forecast to continue to grow until it peaks out at 7.9% in March of next year 2009 – that is the bad news the Central Bank Governor, Leasi Mr. Tommy Scanlan, can not avoid. But with the approval of his Board of Directors, he can encourage financing institutions and trading banks, to ease up on their interest rate on loans for selected development sectors. The idea is to boost local production in key areas like manufacturing, agriculture, tourism and other related areas of development that can impact directly on stopping or substituting overseas imports. “Our national reserves was at ST$180 million or 4 months worth of supply in 2005-06,” Leasi wanted to clarify, “but it climbed back up to $208 million in the year following. ‘By our last financial year ending last June we have saved up to 5 months worth of supply to $255 million in our reserve account.” The Governor and his Board of Directors noted however that the inflation rate continues to remain high and mainly because of the influences of the world market, with oil prices climbing as well as other related costs. ‘We boosted our national reserves last year by tightening up on our interest rates, to try and control overseas purchasing. We are in a position now to ease up a little and encourage banks to drop their interest rates so more funds can be freed out to farmers and others to undertake development projects.” Governor Leasi has already met and convinced the financing institutions and commercial banks bosses to try and keep their current average interest rates of 12.7 % down to at least 12 %. The institutions are already clued in on the long term benefits of a better economy, and are willing to go along with the call from the national monetary monitoring body of Government. There is a catch however where the banks can reduce interest rates on savings or other account deposits. ‘While the new interest policy is now effective, there is a lag time of between 3 and 6 months.” The eventual impact of the new policy once it kicks in fully, plus other influencing factors on world inflation, will see good economic returns in the next 12 months for Samoa. “The Central Banks predicts that by June of 2009-10, our national inflation rate should have dropped under 3%.” Governor Leasi has not set any time frame yet on how long the new interest rates will remain in place. Comments (1) Subscribe to this comment's feed ... written by Anaua, August 22, 2008 We havent heard this type of honest economical assessment from the government yet. Our Prime Minister continues to be optimistic, but it is obvious that if America and Europe sneezes with a possible economic recession, Samoa cannot avoid getting the cold. But if cutting interest rates in America and Britain are not enough to cope with the recession, why not cut tax rates as well? Think about it folks, this is no laughing matter. Write comment Name Email Title Comment

< Prev		Next >

[ Back ]

Polls

--ADVERTISEMENTS--

Google Satellite Map of Eveni Carruthers

--ADVERTISEMENTS--

"Where the natives buy and sell"

--ADVERTISEMENTS--

Latest Comments

Manu Samoa In Tough Pool For 2011 World Cup
all the way

Manu Samoa In Tough Pool For 2011 World Cup
samoa god blezz all of each one of you for playing for our country

Deadly Catch For Fisherman
The poor fisherman who minded his own business while trying to get home to his family is assaulted a...

Manu Samoa In Tough Pool For 2011 World Cup
Having the World cup in NZ is the closest we will get to having the world cup near Samoa. We need a ...

To Err Is Human! To Suffer From That Same Err Is A...
10 to 12 deaths first year of RHD----

Social Network

Join the Newsline Team on Bebo

www.bebo.com/newslineS

Become part of the Newsline Bebo Network

Get News via your Email

Subscribe to Samoa Live News Headlines by Email

Get the Latest News on your Blackberry or PDA

Subscribe in a reader

Sounds from Samoa

Listen to broadcasts from LiveSamoa.com
Courtesy of Plantation Feet, SBC(540am) and
Radio Polynesia(99.9 FM)

http://www.samoalive.com/sliveradio.asx

Live on Weekdays from 8am to 9am

Have your Say

We want your Opinion

LETTERS TO THE EDITOR
If you would like to submit a letter for possible
publication in the print edition of the Newsline,
please send an email to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

We want your News

Submit News from your Area
If you would like to submit News for possible
publication in both the online and print version
of Newsline please feel free to email us
at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Become a News Blogger
Have a passion for writing? Interested in
writing articles for Newsline? Email us
at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .
We are looking for Bloggers from
around the world to contribute to our site.