Tonga: 2006 Article IV Consultation: Staff Report; and Public Information Notice on the Executive Board Discussion

International Monetary Fund

No 2006/241, IMF Staff Country Reports from International Monetary Fund

Abstract: Tonga’s economy has become increasingly vulnerable. Fiscal discipline has weakened, undermining macroeconomic stability and external viability. Medium-term prospects have deteriorated. Moreover, there are other serious downside risks to the fiscal outlook. Further monetary tightening in response to the wage settlement and the full flexibility of the exchange rate system are required. A larger and more dynamic private sector offering alternative employment opportunities would facilitate the downsizing of the public sector. There is a need to improve the reliability, coverage, and timeliness of statistics.

Keywords: ISCR; CR; asset sale; Tongan authorities; private sector; financing; executive board assessment; credit development; executive board discussion; Tongan political system; government operation; private sector credit; severance payment; capital account surplus; Civil service; Wage bargaining; Wage adjustments; Imports; Capital spending; Pacific Islands; Australia and New Zealand (search for similar items in EconPapers)
Pages: 55
Date: 2006-06-28
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