The International Monetary Fund says Tonga's economy is expected to continue to grow this year, fuelled by the agriculture and construction sectors.
Prime Minister's office, Tonga Photo: Supplied
That follows GDP growth of 3.7 percent last year, despite slow growth in neighbouring countries and disruptions caused by El-Niño.
However, the head of an IMF mission that visited the country last week, Elena Loukoianova, said a large increase in domestic spending and potential cost overruns for the Pacific Games could weaken fiscal stability.
On top of that, slow growth in other economies, particularly Australia and New Zealand, could lead to lower aid, remittances, and tourism receipts.
Despite this, Ms Loukoianova said the country's current monetary policy is appropriate, and rapid increases in credit is not yet a concern.
She also welcomed the government's commitment to rein in the wage bill, reform the civil service, and strengthen financial management.
