Tonga: 2016 Article IV Consultation — Press Release; Staff Report; and Statement by the Executive Director for Tonga
IMF Staff Country Reports, June 21, 2016
Source details
- Canonical URL
- Tonga: 2016 Article IV Consultation — Press Release; Staff Report; and Statement by the Executive Director for Tonga
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Bibliographic details
- Published: June 21, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498311816.002
Recent economic developments
- 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.
- Growth in FY2015 was supported by:
- construction,
- tourism,
- strong remittances,
- strong private credit.
- These gains occurred notwithstanding weather-related disruptions to agricultural production.
Economic outlook and projections
- FY2016 real GDP growth is projected to remain relatively strong at 3.1 percent.
- Projected drivers for FY2016:
- a recovery in agriculture,
- an increase in construction activity in preparation for the South Pacific Games.
Risks and channels of external influence
- A protracted period of slower growth in advanced and emerging market economies, particularly in Australia and New Zealand, could weigh on Tonga.
- Channels through which external weakness could affect Tonga:
- aid,
- remittances,
- tourism.
Key takeaway findings
- Post-FY2013 rebound is evident with sequential acceleration to 3.7 percent in FY2015.
- Continued near-term strength projected (3.1 percent in FY2016) backed by agriculture recovery and construction for major sporting event preparations.
- External vulnerabilities concentrated on economic conditions in Australia and New Zealand and their transmission via aid, remittances, and tourism.
International Monetary Fund. "Tonga: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tonga", June 21, 2016.