The Reserve Bank maintained its current accommodative monetary policy stance which supported the monetary policy objectives of maintaining internal and external monetary stability, promoting financial stability and a sound and efficient financial system and conducting its activities in a manner that supports macroeconomic stability and economic growth.
- Monetary Policy Statement: August 2017 PDF 1,523 KB DOWNLOAD THE FULL STATEMENT
The Reserve Bank’s outlook for a robust domestic economic growth remains for 2016/17 at 3.7%, higher than the 2.7% growth projected by the International Monetary Fund (IMF) Article IV mission in September 2017. This growth outlook continues to be driven by developments in the construction, utilities, fisheries, and mining & quarry sectors. The number of events that took place during the year and partial indicators showing improvement in economic activities in 2016/17, support this overall strong growth projection. The 2017/18 real GDP growth estimate has been revised down to 4.0% compared to the February 2017 MPS projection of 4.8%. This downward revision to the growth outlook is mainly driven by the cancellation of Tonga’s hosting of the 2019 Pacific Games which will slow down growth that was projected for the secondary and tertiary sectors of the economy.
However, this growth is still above the 2017 IMF Article IV’s projection of 3.4% growth. Inflationary pressures eased in August 2017 reflecting the wind down of the hike in prices last year when the new excise tax became effective in July 2016. The annual headline inflation slowed to 5.2% in August 2017 from a high level of 8.9% in February 2017 and a 5.1% increase in August 2016. This is slightly higher than the Reserve Bank’s inflation reference rate of 5% per annum. The Reserve Bank expects inflationary pressures to remain in the near term due to the impact of the further increase in custom duty and excise tax effective in July 2017. However, the annual headline inflation is forecasted to gradually decline below the reference rate of 5% per annum after February 2018.
Over the past six months to August 2017, the overall balance of Overseas Exchange Transactions (OET) was a surplus of $27.4 million, which contributed to a rise in the official foreign reserves to $405.0 million. This was sufficient to cover imports of merchandise goods and services for 6.9 months, which remained above the Reserve Bank’s minimum range of 3-4 months of import cover. The level of foreign reserves is also expected to remain at comfortable levels above the minimum range of 3-4 months of import cover, supported by expected higher receipts of remittances and export proceeds, and anticipated Government receipt of budget support and grant funds from development partners. This will be partially offset by the projected rise in imports.
Tonga’s financial system remained sound over the 6 months to August 2017 as the banking system maintained strong capital and liquidity position, supported by comfortable profitability, and non-performing loans continuing to remain low. Broad money and banking system liquidity continued to rise as total banks’ lending rose to a new level in August 2017 and deposits also rose over the 6 months to August 2017. The banks’ total loans to deposit ratio rose in August 2017 to 75.2% from 73.3% in February 2017, due to credit growth of $31.1 million (8.1%) outweighing a $28.1 million (5.4%) increase in deposits. This ratio continued to remain below the 80% minimum requirement which indicates excess liquidity in the banking system remains and that there is capacity for further lending by banks. The Reserve Bank will continue to monitor credit growth to avoid any overheating in the economy.
Net credit to Government declined over the six months to August 2017 and anticipated to decline in the near term, as a result of expected Government budgetary support and grants receipts, as well as improved Government revenue collection. The Reserve Bank will closely monitor the implication of the fiscal policy measures on the monetary policy objectives.
Given the recent developments and the outlook on the monetary policy objectives and macroeconomic and financial soundness indicators, the accommodative monetary policy stance is maintained however the Reserve Bank will remain vigilant and continue to closely monitor developments in the domestic and global economy for early signs of vulnerability or overheating of the economy. Furthermore, the Reserve Bank will continue to update its monetary policy setting to maintain internal and external monetary stability and to promote a sound and efficient financial system, in order to support macroeconomic stability and economic growth.
Fakamatala Fokotu’utu’u ngāue fakapa’anga ki ‘Aokosi 2017
Na’e tali ‘e he Poate ‘a e kau Talēkita ‘a e Pangikē Pule Fakafonua ‘o Tonga΄ ‘i he’enau fakataha na’e fakahoko ‘i he ‘aho 17 ‘o Sanuali 2017, ke tuku atu ‘e he Pangikē Pule Fakafonua ‘a Tonga΄ ‘a e Fakamatala Fokotu’utu’u Ngāue Fakapa’anga ki ‘Aokosi 2017. Ko e fakamatala ko ‘eni΄ ‘oku hā atu ai ‘a e vakai ki he ngaahi fakalakalaka faka’ekonōmika ‘i Tonga ni΄ mo e founga ngāue ‘a e Pangikē Pule΄ ‘i he māhina ‘e ono ki ‘Aokosi 2017. ‘Oku toe tuku atu foki ‘e he Fakamatala ko ‘eni΄ ‘a e fakafuofua ‘a e Pangikē Pule΄ ki he kaha’u΄.
‘Oku kei hokohoko atu ai pē ‘a e ngaahi fokotu’utu’u ngāue fakapa’anga lolotonga ‘a e Pangikē Pule΄ ke faka’ai’ai mo pāotoloaki ‘a e ngaahi ngāue faka’ekonōmika ‘a e fonua΄. ‘Oku taumu’a ‘a e ngaahi tefito’i tu’utu’uni fakapa’anga΄ni ke siofi mo muimui’i ofi e ngaahi fakalakalaka faka’ekonōmika fakalotofonua΄ mo tu’apule’anga΄, tokangaekina e ngaahi fokotu’utu’u ngāue fakapa’anga΄ ke pukepuke e ma’uma’uluta ‘a e tu’unga fakapa’anga΄ pea mo langa hake ha sisitemi fakapa’anga ‘oku malu mo lelei.
‘Oku kei tu’uma’u pē ‘a e fakafuofua ‘a e Pangikē Pule ‘e mālohi ‘a e tupu faka’ekonōmika fakalotofonua΄ ‘aki ‘a e peseti ‘e 3.7 ‘i he ta’u fakapa’anga 2016/17, ‘o ma’olunga eni ‘i he tupu peseti ‘e 2.7 na’e fakafuofua’i ‘e he Kautaha Pa’anga Fakavaha’apule’anga (IMF Article IV) ‘i he’enau ‘a’ahi ne fakahoko ‘i Sepitema 2017. ‘Oku fakafuofua koe tupu faka’ekonōmika ko ‘eni΄ ‘e fakatefito ia mei he ngaahi fakalakalaka ‘i he sekitoa langa΄, ngaahi fiema’u faka’api΄, toutai΄, pea pehee foki ‘i he sekitoa keli’anga koloa mo e maka΄. Na’e hoko ‘a e ngaahi kātoanga lalahi ‘i he lolotonga ‘a e ta’u kae pehee ki he ngaahi fakalakalaka ‘i he ngaahi ngāue faka’ekonōmika ‘i he ta’u fakapa’anga 2016/17, kene tokoni’i ‘a e tupu ‘i he tu’unga faka’ekonōmika ‘a e fonua΄.
‘Oku fakafuofua ‘e peseti ‘e 4.0 ‘a e tupu faka’ekonōmika fakalotofonua΄ ki he ta’u fakapa’anga 2017/18, ‘a ia ko e holo hifo eni mei he peseti ‘e 4.8 ‘i hono fakahoa ki he fakafuofua ne tuku atu ‘i he Fakamatala Fokotu’utu’u Ngāue Fakapa’anga ‘i Fepueli 2017. Ko e liliu ko ‘eni ki he fakafuofua ‘i he tupu faka’ekonōmika fakalotofua΄, na’e fakatefito ia mei hono kaniseli ‘a hono fakahoko mai e Sipoti ‘a e Pasifiki΄ ‘i he 2019, ‘a ia tene fakatuai’i ‘a e tupu ‘i he sekitoa fakatupu koloa΄ mo e ngaahi ngāue΄ ‘o hangē koia na’e fakafuofua’i΄. Kaekehe, ‘oku kei ma’olunga pē ‘a e fakafuofua ko ‘eni΄ ‘i he tupu peseti ‘e 3.4 ne fakafuofua’i ‘e he Kautaha Pa’anga Fakavaha’apule’anga 2017 (2017 IMF Article IV).
Na’e fakafiemālie pē ‘a e hikihiki ‘i he totongi fakalūkufua ‘o e koloa΄ ‘i ‘Aokosi 2017 ‘o fakahaa’i mai ai ‘a e holo ‘i he ma’olunga ‘a e totongi koloa΄ ‘i he ta’u kuo’osi΄, ‘i he taimi na’e kamata ngāue’aki ai ‘a e totongi fo’ou ki he tukuhau ‘eikisia ‘a ia na’e kamata ‘i Siulai 2016. Na’e holo māmālie ‘a e totongi koloa fakata’u΄ ki he peseti ‘e 5.2 ‘i ‘Aokosi 2017. Ko e holo ‘eni mei he tu’unga ma’olunga ko e peseti ‘e 8.9 ‘i Fepueli 2017 pea mo e hiki peseti ‘e 5.1 ‘i ‘Aokosi 2016. ‘Oku kei ma’olunga pe foki ‘eni ‘i he tu’unga fe’unga ‘a e Pangikē Pule΄ ki he totongi ‘o e ngaahi koloa΄ ‘a ia ko e peseti ‘e 5 ki he ta’u. ‘Oku fakafuofua foki ‘e he Pangikē Pule΄ ‘e kei tu’uma’u pē ‘a e tu’unga ma’olunga ‘i he totongi fakalūkufua ‘o e ngaahi koloa΄ ‘o makatu’unga mei he toe hiki hake ‘i he totongi tute΄ mo e tukuhau ‘eikisia΄ ‘a ia na’e kamata ngāue’aki ‘i ‘Siulai 2017. Kaekehe, ‘oku fakafuofua ‘e holo ‘a e totongi fakalūkufua ‘o e ngaahi koloa΄ mei Fepueli 2018, ‘o ma’ulalo ‘i he tu’unga fe’unga ‘a e Pangkē Pule΄ ‘a ia koe peseti ‘e 5 ki he ta’u.
‘I he māhina ‘e 6 kuo’osi΄ ki ‘Aokosi 2017, na’e tokoni ‘a e hulu $27.4 million ko ia ‘i he palanisi fakalūkufua ‘o e fehū’aki pa’anga mo muli΄, ki he hiki hake ‘i he tu’unga ‘o e pa’anga talifaki ‘a e pule’anga΄ ‘i muli΄ki he $405.0 miliona. Na’e fe’unga ‘a e tu’unga ‘o e pa’anga talifaki΄ pea mo e māhina ‘e 6.9 ‘o e koloa mo e ngaahi ngāue hū mai mei muli΄, ‘a ia ‘oku kei ma’olunga ‘aupito pē ‘eni ‘i he tu’unga fe’unga ‘oku fiema’u ‘e he Pangikē Pule΄, ko e māhina ‘e 3 ki he 4 ‘o e koloa mo e ngaahi ngāue hū mai mei muli΄. ‘Oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie ai pē ‘a e pa’anga talifaki ‘i muli ‘a e pule’anga΄ makatu’unga mei he fakafuofua ‘e toe lahiange ‘a e līpa’anga mai mei muli΄, pa’anga hū mai mei he uta koloa ki muli΄, ngaahi pa’anga tokoni fakapatiseti moe tokoni ki he Pule’anga΄ mei he ngaahi hoa ngāue fakalakalaka ‘a e fonua΄, neongo ‘oku fakafuofua ‘e toe hiki hake mo e lahi ‘o e hū koloa mei muli΄.
Na’e ‘i he tu’unga fakafiemālie΄ pē ‘a e ngaahi pangikē ‘i he māhina ‘e 6 ki ‘Aokosi 2017. Ne kei ‘i he tu’unga lelei pe ‘a e sino’i pa’anga tefito (capital) ‘a e ngaahi pangikē, makatu’unga mei he tu’unga ma’olunga ‘a e tupu fakapa’anga΄ (profitability), pea mo e kei ma’ulalo ‘a e ngaahi nō palopalema΄. Na’e kei hokohoko atu pē ‘a e hiki ‘i he pa’anga fakalūkufua ‘a e fonua΄ (broad money) pea mo e pa’anga ngāue (liquidity) ‘a e ngaahi pangikē makatu’unga mei he tu’unga ma’olunga ne a’u ki ai ‘a e ngaahi nō kuo tuku atu ‘e he ngaahi pangikē ‘i ‘Aokosi 2017 pea mo e toe lahi ange ‘a e fakahū pa’anga ki he ngaahi pangikē ‘i he māhina ‘e 6 ki ‘Aokosi 2017. Na’e hiki hake ‘i ‘Aokosi 2017 ‘a e lahi ‘o e ngaahi nō ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa’anga΄ (loan/deposit ratio) ki he peseti ‘e 75.2%, ‘a ia ne ma’olunga eni mei he peseti ‘e 73.3 ‘i Fepueli 2017 ‘a ia ‘oku kei ma’ulalo pē ‘i he peseti ‘e 80 kuo tu’utu’uni ‘e he Pangikē Pule΄ ke a’usia ‘e he ngaahi pangike΄. ‘Oku hā mahino mei heni ‘a e kei ‘i ai pē ‘a e faingamālie ke toe fakalahi ‘a e ngaahi nō ke tuku atu ‘e he ngaahi pangikē. ‘E kei hokohoko atu pē ‘a hono siofi ‘e he Pangikē Pule΄ ‘a e tupu ‘i he ngaahi nō ke fakapapau’i ‘e ‘ikai ke ‘i ai ha’ane uesia pe kaunga kovi ki he tupu faka’ekonōmika ‘a e fonua΄.
Na’e holo ‘a e lahi e pa’anga ‘e totongi fakafoki ‘e he ngaahi pangike΄ ki he Pule’anga΄ ‘i he māhina ‘e 6 ki ‘Aokosi 2017 pea ‘oku fakafuofua ke holo ai pē ‘i he kaha’u vave mai΄, makatu’unga mei he ngaahi pa’anga tokoni fakapatiseti mo e tokoni ki he Pule’anga΄ ‘a ia ‘oku ‘amanaki ‘e hū mai΄, kae pehee foki ki he toe lelei ange ‘a e tānaki pa’anga hū mai ‘a e Pule’anga΄. ‘E kei hokohoko atu ai pe ‘a hono siofi ‘e he Pangikē Pule΄ ‘a hono ngāue’aki ‘o e ngaahi me’afua tu’utu’uni ngāue ‘a e Pule’anga΄ ‘i he ngaahi ta’umu’a ngāue fakapa’anga΄.
Koe’uhi΄ ko e fakafiemālie ‘a e ngaahi fakalakalaka ki mui ni΄ pea mo e fakafuofua ki he kaha’u΄ ‘i he ngaahi taumu’a ngāue fakapa’anga΄, tu’unga faka’ekonōmika fakalūkufua΄ kae pehee ki he ngaahi me’afua ki he tu’unga fakapa’anga΄, ‘e kei hokohoko atu ai pē ‘a hono ngāue’aki ‘e he Pangikē Pule΄ ‘a e ngaahi fokotu’utu’u fakapa’anga lolotonga. ‘I he’ene pehee, ‘e kei tu’u mateuteu ai pē ‘a e Pangikē Pule΄ pea mo hokohoko atu ‘a hono siofi mo muimui’i ofi e ngaahi fakalakalaka faka’ekonōmika fakalotofonua΄ mo tu’apule’anga fakatou’osi, ki ha ngaahi faka’ilonga te ne uesia ‘a e tupu faka’ekonōmika e fonua΄. ‘E kei hokohoko atu ai pē foki ke tu’u mateuteu ‘a e Pangikē Pule΄ ke liliu ‘a e ngaahi fokotu’utu’u ngāue fakapa’anga΄ ‘oka fiema’u, ke tauhii e ma’uma’uluta ‘a e tu’unga fakapa’anga΄ pea mo langa hake ha sisitemi fakapa’anga ‘oku malu mo lelei ke tokoni ki he ma’uma’uluta mo e tupu faka’ekonōmika ‘a e fonua΄.
