{
  "title": "Tonga: 2017 Article IV Consultation-Press Release; and the Staff Report for Tonga",
  "publication": "IMF Staff Country Reports, January 17, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2018/01/17/tonga-2017-article-iv-consultation-press-release-and-the-staff-report-for-tonga-45566",
  "canonical": "https://www.imf.org/en/publications/cr/issues/2018/01/17/tonga-2017-article-iv-consultation-press-release-and-the-staff-report-for-tonga-45566",
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  "summary": "This 2017 Article IV Consultation highlights that over recent years, Tonga has enjoyed robust growth and macroeconomic stability. Growth continued to be strong at 2.7 percent in FY2017 following 3.",
  "sections": [
    {
      "heading": "Macroeconomic overview and recent performance",
      "content": "- Over recent years, Tonga has enjoyed robust growth and macroeconomic stability.\n- Real GDP growth:\n  - 3.4 percent in FY2016\n  - 2.7 percent in FY2017\n- Growth drivers in FY2016–FY2017:\n  - construction\n  - agriculture\n  - tourism\n  - strong remittances\n  - strong private credit growth\n- Inflation:\n  - Inflation spiked in FY2017 because of a new import tax and an increase in domestic food prices.\n- External sector:\n  - The country’s external position weakened slightly owing to construction-related imports.\n  - Reserves were supported by strong remittances and donor aid."
    },
    {
      "heading": "Outlook and projections",
      "content": "- The outlook for the Tongan economy is favorable, despite external headwinds.\n- Real GDP growth is projected at 3.4 percent in FY2018, driven by:\n  - construction\n  - agriculture\n  - tourism"
    },
    {
      "heading": "Key takeaways for policy focus",
      "content": "- Monitor inflationary pressures stemming from tax policy changes and domestic food-price movements.\n- Manage external vulnerabilities related to construction-led import demand to safeguard reserves.\n- Leverage strong remittances and donor aid to support reserve buffers and macro stability.\n- Sustain reforms and policies that support private credit growth and sectoral drivers (construction, agriculture, tourism) to achieve the projected 3.4 percent growth in FY2018.\n\nSource: Tonga: 2017 Article IV Consultation-Press Release; and the Staff Report for Tonga, January 17, 2018.\n\n---\n\n Content in this bundle\n\n- Country Report\n  - Country Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Country Report (PDF){rel=\"external\" type=\"application/pdf\"}"
    }
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    "[Markdown version](/en/publications/cr/issues/2018/01/17/tonga-2017-article-iv-consultation-press-release-and-the-staff-report-for-tonga-45566/index.md)",
    "[Structured JSON version](/en/publications/cr/issues/2018/01/17/tonga-2017-article-iv-consultation-press-release-and-the-staff-report-for-tonga-45566/index.json)",
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    "Published: January 17, 2018",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781484338032.002",
    "Over recent years, Tonga has enjoyed robust growth and macroeconomic stability.",
    "Real GDP growth:",
    "Growth drivers in FY2016–FY2017:",
    "Inflation:",
    "External sector:",
    "The outlook for the Tongan economy is favorable, despite external headwinds.",
    "Real GDP growth is projected at 3.4 percent in FY2018, driven by:",
    "Monitor inflationary pressures stemming from tax policy changes and domestic food-price movements.",
    "Manage external vulnerabilities related to construction-led import demand to safeguard reserves.",
    "Leverage strong remittances and donor aid to support reserve buffers and macro stability.",
    "Sustain reforms and policies that support private credit growth and sectoral drivers (construction, agriculture, tourism) to achieve the projected 3.4 percent growth in FY2018.",
    "**Country Report**"
  ],
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