IMF Staff Country Reports

Tonga : 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tonga

Author/Editor:

International Monetary Fund. Asia and Pacific Dept

Publication Date:

June 21, 2016

Electronic Access:

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Summary:

This paper discusses recent economic developments, economic outlook, risks, and challenges in Tonga. The Tongan economy has been rebounding since a contraction in FY2013. Growth accelerated from 2.1 percent in FY2014 to 3.7 percent in FY2015, supported by construction, tourism, strong remittances, and strong private credit, notwithstanding weather-related disruptions to agricultural production. The FY2016 real GDP growth is projected to remain relatively strong at 3.1 percent, driven by a recovery in agriculture and an increase in construction activity in preparation for the South Pacific Games. However, a protracted period of slower growth in advanced and emerging market economies, particularly in Australia and New Zealand, could weigh on Tonga via aid, remittances, and tourism channels.

Series:

Country Report No. 16/178

Subject:

Article IV consultation reports Balance of payments statistics Bank supervision Banking sector Debt sustainability analysis Economic growth Economic indicators External shocks Fiscal policy Fiscal reforms Macroprudential Policy Monetary policy Press releases Staff Reports Tonga