Tonga: 2017 Article IV Consultation-Press Release; and the Staff Report for Tonga

January 17, 2018

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 3.4 percent in FY2016, supported by construction, agriculture, tourism, strong remittances, and strong private credit growth. Inflation spiked in FY2017 because of a new import tax and an increase in domestic food prices. The country’s external position weakened slightly owing to construction-related imports, with reserves supported by strong remittances and donor aid. The outlook for the Tongan economy is favorable, despite external headwinds. Real GDP growth is projected at 3.4 percent in FY2018, driven by construction, agriculture, and tourism.

Subject: Credit, Environment, External debt, Fiscal policy, Fiscal stance, Natural disasters, Public debt, Revenue administration

Keywords: Asia and Pacific, Australia and New Zealand, budget revenue, CR, creating flow, current account, distress rating, expenditure measure, Fiscal stance, GDP, GDP deflator, GFS TA mission, Global, gradual adjustment, ISCR, moderating inflation, Natural disasters, Pacific Islands, PFTAC TA, public sector employment reform, real GDP, remittance inflow

Pages:
69
Volume:
2018
DOI:
https://doi.org/10.5089/9781484338032.002
Issue:
012
Series:
Country Report No. 2018/012
Stock No:
1TONEA2018001
ISBN:
9781484338032
ISSN:
1934-7685

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