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Country Report Tonga Product Image

Country Report Tonga

  • ID: 2138734
  • February 2015
  • Region: Tonga
  • 17 Pages
  • The Economist Intelligence Unit

Figures published by the National Reserve Bank of Tonga (NRBT, the central bank) on February 13th showed that growth in credit to the private sector reached 4.9% in 2014, a sharp improvement from the 4.5% decline in credit to the private sector in 2013.

Although the uptick in private-sector credit is welcome, a breakdown of the data shows that the stock of outstanding loans to business rose by only 6.4% in 2014, down from growth of 12.2% in 2013, whereas growth in outstanding loans to households and non-bank institutions rose by 14%, compared with 13.7% in 2013. The slowdown in credit to business underlines the fact that rapid economic growth is unlikely to set in in Tonga.

NRBT also released trade data that showed imports growing by 8.9% year on year in 2014 to T$281m (US$141m), with exports up by 6.4% to T$15m. Tonga's goods trade deficit is expanding, with imports rising rapidly to service private consumption needs in Tonga. Other data in the release showed that tourism receipts were down by 22.9% year on year in 2014 to T$64m. The previous year had recorded an 8.8% year-on-year increase in such receipts (to T$83m). Private remittances rose to T$218m in the full calendar year, up by only 2.9% year on year, well below the 4.8% pace of growth, to T$212m, that was recorded in 2013.

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Country Report Tonga

External accounts deteriorate
Event
Analysis
Impact on the forecast

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Note: Product cover images may vary from those shown

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