Asia Regional Integration Center

Economic growth was 0.4% in FY2018, well below the 3.2% average posted from FY2015 to FY2017. The destruction of crops, public infrastructure, and buildings inflicted by Cyclone Gita constrained growth. However, post-cyclone recovery and reconstruction avoided a contraction of the Tongan economy. GDP is expected to grow by 2.1% in FY2019 and 1.9% in FY2020, largely supported by reconstruction and spending on planned infrastructure projects. These will be financed through fiscal spending and are thus projected to increase the government budget deficit. However, higher tax revenues should help narrow the fiscal deficit by FY2020.