Increase in govt spending — mostly COVID funds — contributed to 2022 GDP growth

Pago Pago, AMERICAN SAMOA — An increase of 1.8 percent in the real gross domestic product (GDP) for American Samoa in 2022 — after decreasing 0.8 percent in 2021 — “reflected increases in government spending and exports,” according to the U.S. Bureau of Economic Analysis (BEA) statistics report last Friday.

However, BEA explained that: “Due to lags in the availability of data for various components of GDP, the statistics presented for 2022 are preliminary estimates.”

For example, data covering government spending and imports of goods for the fourth quarter of 2022 were not available in time for incorporation into this year’s estimates of GDP. As additional source data becomes available, BEA said it will incorporate the information and will release updated estimates once a year.

According to the federal agency, personal consumption expenditures, private fixed investment, and private inventory investment subtracted from growth. Imports, a subtraction item in the calculation of GDP, also decreased.

BEA provided a summary report on each major component of the GDP. For government spending, BEA said it increased 5.0 percent, reflecting growth in territorial government spending.

It says that territorial government spending was supported by federal grant revenues, including Coronavirus State and Local Fiscal Recovery Fund payments and Education Stabilization Fund payments authorized by the Coronavirus Aid, Relief, and Economic Security Act of 2020; the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021; and the American Rescue Plan Act of 2021.

For “exports of goods and services” BEA said it increased 3.0 percent, primarily reflecting an increase in exports of canned tuna and related products. BEA also cited data from the U.S. Census Bureau U.S. Trade with Puerto Rico and U.S. Possessions reports, which show that the quantities of prepared or preserved fish shipped from American Samoa to the 50 states and the District of Columbia were 3.3 percent higher in 2022 than in 2021.

“Exports of services also increased, primarily reflecting growth in visitor spending,” it says.

According to BEA, ‘personal consumption expenditures (PCE)’ decreased 7.8 percent, reflecting decreased spending on goods, such as motor vehicles and food. BEA explained that the economic impact payments distributed to households through the CRRSA Act and the American Rescue Plan Act tapered off by 2022. And these payments had supported consumer spending in 2021.

Other decreases cited by BEA:

•           Private fixed investment (PFI) - decreased 38.4 percent, reflecting declines in residential and nonresidential structures and purchases of equipment.

•           Private inventory investment - decreased, reflecting a decline in inventory investment in the tuna canning industry.

•           Imports - decreased 12.5 percent, primarily reflecting decreases in goods imported for domestic consumption, including goods within PCE, PFI, and private inventory investment.

BEA said the statistics were developed under the Statistical Improvement Program funded by the Office of Insular Affairs (OIA) of the U.S. Department of the Interior.

OTHER ISSUES

BEA also released last Friday updates on the GDP by industry and compensation by industry for 2021

In 2021, real GDP decreased 0.8 percent. The newly available GDP by industry data, which are released on a 1-year lag, reveal that the private sector was the primary source of the decline in real GDP in 2021.

According to BEA, the private sector decreased 5.2 percent, primarily reflecting a decline in manufacturing. The decline in manufacturing reflected decreased tuna cannery output.

BEA also said that the government sector increased 8.1 percent, reflecting growth in compensation of territorial government employees.

Additionally, total compensation increased from $345 million in 2020 to $364 million in 2021. “The $19 million increase reflected growth in territorial government compensation,” said BEA, a bureau of the U.S Commerce Department.

Specific details, data, graphics, statistics and other information on American Samoa is on BEA online (https://www.bea.gov/data/gdp/gdp-american-samoa)