## 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](https://www.imf.org/en/publications/cr/issues/2016/12/31/tonga-2016-article-iv-consultation-press-release-staff-report-and-statement-by-the-executive-43992)

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## Bibliographic details
- Published: June 21, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498311816.002

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### 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.*

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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/tonga-2016-article-iv-consultation-press-release-staff-report-and-statement-by-the-executive-43992_