Tonga: 2023 Article IV Consultation-Press Release; and Staff Report

November 3, 2023

Preview Citation

Format: Chicago

Tonga: 2023 Article IV Consultation-Press Release; and Staff Report, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Summary

The Tongan economy is performing strongly, underpinned by resilient remittance inflows and major reconstruction activities following the Hunga Tonga–Hunga Haʻapai (HTHH) volcanic eruption in January 2022. However, supply-side constraints resulting from severe labor shortages and damaged tourism facilities are impeding the recovery and have intensified inflation pressures. In this context, the authorities are confronting a challenging tradeoff between supporting reconstruction and managing inflation in the short term. In the long term, Tonga's high vulnerability to natural disasters complicates its efforts to create the fiscal space necessary to finance development spending.

Subject: Debt sustainability, Environment, External debt, Inflation, International organization, Monetary policy, Natural disasters, Prices, Public debt

Keywords: Australia and New Zealand, Climate resilience, Debt sustainability, Development goal, Development objective, Development spending needs, GDP compilation capacity, Global, Inflation, Inflation pressure, Natural disasters, Pacific Islands, PFTAC mission

Publication Details

Pages:

74
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2023/361
Stock No:

1TONEA2023001
ISBN:

9798400258800
ISSN:

1934-7685

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