8 Dec 2009

IMF gives loan to Samoa to cushion tsunami impact

2:15 pm on 8 December 2009

The International Monetary Fund says it will provide 9.3 million US dollars to Samoa to help the country recover from a September earthquake and tsunami disaster.

The IMF says the loan is aimed at providing the Samoan authorities with financial assistance to support the country's external reserves amid shortfalls in export earnings and increased import costs related to the disaster response.

The IMF executive board approved the aid to Samoa under the rapid-access component of the Exogenous Shocks Facility, a lending instrument to help a country deal with a major negative impact beyond the control of its government.

The deputy managing director, Takatoshi Kato, says owing to its scale, the disaster has severely undercut Samoa's prospects for a quick recovery from the global recession.

The IMF official has warned that the significant fiscal cost of emergency relief and rehabilitation will result in sharply higher fiscal deficits over the coming two to three years.