5 Mar 2007

Tonga's Minister of Finance says economy likely to deteriorate

11:07 am on 5 March 2007

Tonga's Minister of Finance has warned that the economy is likely to deteriorate over the next year.

Siosiua 'Utoikamanu, says the government has suffered a massive hit on its revenue stream following the losses suffered by the country's businesses in the riots last November.

He said that came on top of lower remittances and tourist receipts.

The Minister said in a statement the future outlook was not good because businesses were going to take a while to return to normality.

He said last year's budget process was touted as the most difficult due to obligations to the public service pay settlement and redundancies, but this year was likely to be worse.

The Minister said the biggest challenge was to maintain the delivery of core public services such as health, education and law and order.

He said any other non-core services would have to face significant budget cuts.