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

International Monetary Fund

No 2018/012, IMF Staff Country Reports from International Monetary Fund

Abstract: 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.

Keywords: ISCR; CR; current account; real GDP; GDP; GDP deflator; gradual adjustment; creating flow; PFTAC TA; public sector employment reform; remittance inflow; distress rating; expenditure measure; budget revenue; moderating inflation; Natural disasters; Fiscal stance; Pacific Islands; Australia and New Zealand; Global; Asia and Pacific; GFS TA mission (search for similar items in EconPapers)
Pages: 69
Date: 2018-01-17
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