First, to keep inflation below the 5% reference rate, including through seeking Government’s assistance in controlling domestic and wage inflation; and second, to provide targeted support towards economic recovery of vulnerable sectors to address supply shortages and promote business investments.
- Monetary Policy Statement: August 2023 PDF 1,312 KB DOWNLOAD THE FULL STATEMENT
Tonga's economy is showing signs of improvement. It is estimated to have grown by 2.4% in FY2023 and is expected to continue growing at a rate of 2.6% in FY2024. This growth is driven by reconstruction efforts, Government’s new construction projects, an anticipated recovery in the agriculture sector, and improvements in tourism-related sectors due to the resumption of international travel. However, challenges such as labour shortages and skill gaps are hindering economic activities and contributing to inflationary pressures.
While inflation has decreased to 4.8% in July 2023 in line with forecasts, Governor Tatafu Moeaki stated “he is concerned that it may rise above the 5% reference rate in the next two quarters due to domestic factors and rising petroleum prices. Imported inflation has eased to 1.9%, but high domestic inflation at 8.8% remains a concern, leading to core inflation hovering around 10%. Supply-side issues are pushing up domestic food prices, affecting other related prices and potentially keeping inflation above 5% in the next two quarters.” These factors are beyond the NRBT’s control and Moeaki therefore emphasizes “the importance of close coordination with the Government fiscal policy measures and government-wide actions that can alleviate the cost of living and reduce inflation”.
In terms of external stability, foreign reserves are healthy at $945.2 million (equivalent to 13.3 months of import cover) as of July 2023. This is attributed to increasing inflows from development partners to support Government recovery effort, remittances, and travel receipts. The outlook is positive, with foreign reserves expected to remain above the recommended level of 7.5 months of import cover.
The banking system is supportive of economic growth, with annual credit growth gaining momentum at 8.4% in June 2023. However, an increase in non-performing loans as part of the economic recovery is monitored closely. Enhanced supervision of banks and non-bank financial institutions is crucial to mitigate risks to financial stability. The monetary policy stance since February 2023 of reducing excess liquidity in the banking system would also improve the effectiveness of monetary policy transmissions.
The NRBT will closely monitor both global and domestic economic developments and make necessary adjustments to its monetary policy.
Fakamatala Fokotu‘utu‘u Ngāue Fakapa‘anga: ‘Aokosi 2023
Kuo tali ‘e he Poate ‘a e kau Talēkita ‘o e Pangike Pule ‘o Tonga ke hoko atu ‘a e fakamamafa ‘a e tokanga ‘i he Fakamatala Fokotu‘utu‘u Ngāue Fakapa‘anga ‘o ‘Aokosi 2023 ki he ongo me’alalahi ‘e ua: ‘uluaki΄, ke tauhi ‘a e hikihiki ‘i he totongi koloa ‘i he tu‘unga fe‘unga ko e ma’ulalo he peseti ‘e 5, ‘o kau ki ai ‘a e kumi tokoni ki he Pule‘anga ‘i hono ngaahi fatongia ke ta‘ota‘ofi ‘a e hikihiki ‘i he totongi koloa΄ pea mo e vahenga΄; pea ko hono ua΄, ke tokoni ki he fakaakeake faka‘ekonōmika ‘a e fonua΄ ‘o fakatefito ‘i he ngaahi sekitoa laveangofua΄ ke malava ‘o lahiange ‘a e koloa ‘oku tuku mai fakatatau ki he fiema‘u koloa ‘a e kakai΄ pea mo faka‘ai‘ai ‘a e inivesi ‘a e ngaahi pisinisi΄ ke ngaahi e ngaahi koloa ni.
Kuo hā mai ngaahi faka‘ilonga kuo fakaakeake ‘a e ekonōmika ‘o Tonga΄. ‘Oku fakafuofua ne tupu peseti ‘e 2.4 ‘i he ta‘u fakapa‘anga 2023 pea ke tupu peseti ‘e 2.6 ‘i he ta‘u fakapa‘anga 2024. ‘Oku fakatefito ‘a e ngaahi langa fakaakeake΄ mei´ he ngaahi ngāue langa fo‘ou ‘a e Pule‘anga΄, fakaakeake ‘i he sekitoa ngoue΄, mo e ngaahi fakalakalaka ‘i he ngaahi sekitoa felāve‘i mo e takimamata΄ makatu‘unga ‘i he toe hoko atu ‘a e fefolau‘aki fakavaha‘a pule‘anga΄. Kaekehe, ko e ngaahi pole hangē ko e nounou faka-kaungāue mo e faka-taukei΄ ‘oku΄ne faka’ātungia‘i ‘a e vave ‘a e ngāue faka‘ekonōmika΄ pea toe kaunga ki he hikihiki tō ‘a e ngaahi totongi koloa΄.
Neongo kuo holo ‘a e totongi koloa΄ ki he peseti ‘e 4.8 ‘i Siulai 2023 ’o fenāpasi mo e ngaahi fakafuofua΄, ‘oku pehē ‘e Kōvana Tatafu Moeaki “ ‘oku΄ne hoha’a ‘e malava pē ke toe kaka ki ‘olunga ‘a e totongi koloa ‘i he ongo kuata ‘e ua ka hoko mai΄ ‘o ma‘olunga ange ‘i he tu‘unga fe‘unga ko e peseti ‘e 5 ‘o fakatefito ‘i he ngaahi nounou hono ngaohi e ngaahi koloa fakalotofonua mo e hikihiki ‘i he ngaahi totongi lolo΄. Kuo holo ‘a e totongi koloa hū mai mei muli΄ ki he peseti ‘e 1.9, ka ‘oku kei fai e tokanga΄ ki he ma‘olunga ‘o e faka’avalisi totongi koloa fakalotofonua΄ ‘i ‘olunga he peseti ‘e 8.8 ‘aia ne tupu ai ‘a e nofo holo pē ‘a e hikihiki ‘i he totongi koloa tefito΄ (‘ikai ke kau ‘a e koloa ma’u’anga ivi΄ mo e me’akai) ‘i he peseti ‘e 10. Ko e fe’āmokaki ‘i he tafa‘aki fo‘u koloa΄ (supply side) ‘oku΄ne teke hake ‘a e totongi ‘o e ngaahi me’akai fakalotofonua΄, ‘o uesia ai ‘a e ngaahi totongi koloa felāve‘i΄ ‘o malava ke kei ‘i ‘olunga ‘a e totongi koloa fakalukufua΄‘i he peseti ‘e 5 ‘i he kuata ‘e ua ka hoko΄”. Ko e ngaahi makatu‘unga´ ni ‘oku ‘i tu‘a ‘i he mafai ‘a e Pangikē Pule΄ pea ‘oku fakamamafa‘i ai ‘e Moeaki ‘a e “mahu‘inga ‘o e fengāue‘aki mo e ngaahi fatongia ‘a e Pule‘anga΄ he ‘e malava ai ke fakasi’isi’i ‘a e hikihiki ‘i he fakamole faka‘aho (cost of living) mo fakasi‘isi‘i ‘a e hikihiki tō ‘i he ngaahi totongi koloa΄”.
‘I he tu’unga malu fakapa‘anga fakatu‘apule‘anga΄, ‘oku fakafiemalie pē ‘a e pa‘anga talifaki ‘i muli ‘a e fonua΄ ‘o fe‘unga mo e $945.2 miliona (tatau mo e mahina ‘e 13.3 ‘o e koloa hū mai mei muli) ‘i Siulai 2023. Ne makatu‘unga ‘eni mei he lahi ‘a e pa‘anga hū mai mei he ngaahi hoa ngāue fakalakalaka ke tokoni ki he ngaahi ngaue ‘a e Pule‘anga΄, ngaahi talafi pa‘anga fakataautaha mai mei muli΄, pea mo e pa‘anga hū mai mei he fefolau‘aki΄. ‘Oku fakafuofua ke kei ma’olunga pe ‘i he kaha’u´ ‘a e pa‘anga talifaki ‘i muli ‘a e fonua΄ ‘o ma‘olunga ange ‘i he tu‘unga fiema’u ko e mahina ‘e 7.5 ‘o e koloa hū mai mei tu‘apule‘anga.
‘Oku tokoni ‘a e tafa‘aki fakapapangikē ki he tupu faka‘ekonōmika ‘o ho‘ata mei he tupu fakata’u peseti ‘e 8.4 ‘a e nō kuo tuku atu ‘i Sune 2023. Kaekehe, ‘oku hiki ai pe mo e ngaahi nō palopalema ka ‘oku muimui’i ofi ‘eni ‘e he Pangikē Pule΄. ‘Oku mahu‘inga hono fakamalohia ‘a hono tokanga‘i ‘a e ngaahi pangikē mo e ngaahi kautaha fakapa‘anga kehe ‘ikai ko ha pangikē ke fakasi’isi’i ha ngaahi uesia ‘e malava ke hoko ki he tafa‘aki fakapa‘anga΄. ‘Oku hoko atu ‘a e fokotu’utu’u ngaue fakapa‘anga ne tuku atu ‘i Fepueli 2023 ‘o fakataumu‘a ke holoki ‘a e hulu ‘i he pa‘anga ngāue ‘a e ngaahi pangikē ke tokoni ki hono fakahoko lelei pea a‘usia ‘a e ngaahi taumu‘a ‘o e fokotu’utu’u ngaue fakapa‘anga΄.
