Tonga: Recent Economic Developments

International Monetary Fund

No 1997/040, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper describes economic developments in Tonga during the 1990s. From 1993 to 1996, financial policies were quite expansionary. Following the licensing of two new banks, credit growth accelerated in 1994. The National Reserve Bank of Tonga initially adopted an accommodating stance, but in December 1995, tightened monetary policy significantly. Hampered by its poor profitability in the use of indirect monetary instruments, it relied on an increase in reserve requirements. Meanwhile, fiscal policy had added further to demand pressures with the recurrent budget surplus declining, owing to a cost-of-living adjustment to government wages.

Keywords: ISCR; CR; public enterprise; Tongan authorities; exchange rate; private sector; commercial bank; minimum lending rate; debt service; broad money; Exports; Public enterprises; Agroindustries; Imports; Australia and New Zealand (search for similar items in EconPapers)
Pages: 65
Date: 1997-05-27
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