## Tonga: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tonga

_IMF Staff Country Reports, November 25, 2024_

## Source details

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## Bibliographic details
- Published: November 25, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400293801.002

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### Economic activity and drivers
- Economic activity has strengthened, bolstered by consistent remittance flows, continued tourism recovery, and robust construction activities.
- Near-term baseline economic outlook remains favorable, appropriately supported by expansionary fiscal and monetary policy.
- Large public investment projects and a rebound in agricultural output (as the effects of El Nino dissipate) are key contributors to domestic demand.

### Inflation
- Headline inflation peaked at 14.1 percent in September 2022 and has since been normalizing.
- Inflationary pressures have substantially eased.

### Growth projections
- Real gross domestic product (GDP) growth is projected to accelerate to 2.4 percent in FY2025, mostly led by continued strength in domestic demand including large public investment projects and a rebound in agricultural output.
- Tonga’s long-term growth is projected at 1.2 percent, reflecting structural constraints.

### Medium- and long-term risks and constraints
- Medium-term growth prospects remain uneven.
- Long-term constraints identified:
  - Exposure to increasingly frequent natural disasters.
  - Persistent loss of workers to emigration.
  - Limited economies of scale due to geographical barriers.

### Policy recommendations and structural priorities
- Implement structural reforms focused on:
  - Bolstering disaster resilience.
  - Advancing digital transformation.
  - Strengthening governance frameworks to foster a conducive business environment.
- These reforms are described as essential to meet Tonga’s development goals.

### Publication metadata and identifiers
- Pages: 82
- Series: Country Report No. 2024/326
- Issue: 326
- Volume: 2024
- ISBN: 9798400293801
- DOI: https://doi.org/10.5089/9798400293801.002

*Source: Tonga: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tonga (November 25, 2024).*

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_Source: https://www.imf.org/en/publications/cr/issues/2024/11/25/tonga-2024-article-iv-consultation-press-release-staff-report-and-statement-by-the-558840_