Monthly Economic Update: November 2024
- Details
- Category: Economic Releases
Export activities in the primary sector slowed in September 2024. Total agricultural exports plummeted by 254.7 tonnes (45.3%) over the month, due to lower exports of root crops, coconut and watermelon. Credit to the industrial sector showed mixed outcomes in September 2024. Lending to the construction sector recorded a slight decline over the month of 0.2% ($0.05 million), while lending to the mining & quarrying sector rose by 17.1% ($0.02 million). Indicators in the services sector portrayed a decline in performance for September 2024.
Remittances Receipts for February 2023
- Details
- Category: Economic Releases
February 2023’s remittance receipts continued to decline by $0.1 million (0.4%) to $37.5 million. Funds received from private transfer and compensation of employees drove the overall monthly decline with declines of $0.7 million (2.1%) and $0.2 million (6.9%) respectively.
Monthly Economic Review for November 2022
- Details
- Category: Economic Releases
The expected recovery for the Tongan economy in FY2022/23 is to continue even with the continuing impact of the invasion of Ukraine and global slow down. Imports are projected to strengthen in line with the economic recovery, while remittance receipts and inflows from donor funds return to pre-pandemic levels.
Overseas Exchange Transactions for December 2021
- Details
- Category: Economic Releases
The Overseas Exchange Transactions (OET) recorded an overall surplus of $33.6 million in December 2021 compared to the $26.9 million surplus in November 2021. This stemmed mostly from increases in net transfer receipts and income, offsetting the widening trade and services deficits.
Banking Sector Development for December 2021
- Details
- Category: Economic Releases
Credit growth is expected to remain subdued in the near term, while non-performing loans is projected to rise for businesses and households' housing and personal loans. These are mostly driven by the uncertainties of the COVID-19 pandemic, weak investment appetite, and softening aggregate demand.
Remittances for December 2021
- Details
- Category: Economic Releases
Similar to previous years, remittance receipts peaked in December in line with the Christmas holidays. Remittance receipts hit a new monthly high of $51.9 million, which was $10.4 million (24.9%) higher than the previous month. The significant rise in private transfer receipts drove the monthly rise in remittance receipts.
Electricity Consumption & Production
Electricity Consumption & Production for 2015
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NOV |
DEC |
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Container Registrations
June 2018
Released on 7 September 2018 | Download the complete release | 
169 KB
| Jun 18 |
May 18 |
Apr 18 |
Mar 18 |
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| 1,024 |
1,046 | 941 | 1,032 | 539 |
| Business |
547 | 550 | 432 | 492 |
| Private |
477 | 496 | 509 | 540 |
Total container registrations remained high over the month
As a partial indicator for the trade sector, the number of containers indicated strong trade activites over the month as it remained high. The total container registrations slightly declined over the month by 22 containers (2.1%) driven by a 3.8% and 0.5% fall in private and business containers respectively. This is also higher than the monthly average of 877 containers in the past five years. The number of business containers reflected the continued busy season in Tonga as annual church conferences continued and preparations for the Heilala Festival. Containers that arrived on cargo vessels from Australia, United States and Japan decreased over the month and outweighed the increase in containers from Indonesia and New Zealand.
Similarly, total payment for imports (excluding oil) slightly declined over the month by $0.6 million (1.8%) coinciding with the decline in total container registrations. This was due to a decline in payment for wholesale & retail imports of $4.9 million (19.8%), which outweighed a rise in payments for miscellaneous goods (such as electrical infrastructure materials and medical goods) of $2.9 million, construction imports and motor vehicles of $0.8 million and $0.2 million respectively.
Over the year to June 2018, the total container registrations rose by 857 containers (7.9%). Both business and private containers increased by 484 (8.5%) and 373 (7.2%) respectively indicating a rise in the informal distribution sector and a vibrant trade sector. This supports the Reserve banks’ expectation that the trade sector will grow by 2.0% in 2017/18. It is also consistent with a $22.0 million (7.0%) rise in import payments (excluding oil) as a result of higher payments for the import of wholesale & retail goods and miscellaneous goods (such as electrical infrastructure materials, medical, and technological goods).
The Reserve Bank expects imports and consequently container registrations to generally increase in the near term coinciding with the growing demand for construction. On-going construction projects and new private residential constructions are anticipated to contribute to the rise. The excise tax and import duty exemptions on food items, clothes, beds and building materials in the wake of TC Gita is expected to increase the in-kind assistance from families abroad. Hence, the total number of imported containers is expected to rise in the upcoming months. Spill over effects on the trade, tourism, construction sectors and other sectors in the economy are also anticipated.
Container Registrations Releases
Inflation
July 2018
Released on 12 September 2018 | Download the complete release | 239 KB
| Jul 18 | Jun 18 | May 18 |
Apr 18 | |
| Headline * | 6.1 | 5.9 | 9.4 | 9.6 |
| Domestic ^ | 2.6 | 2.0 | 5.6 | 5.8 |
| Imported ^ | 3.5 | 3.9 | 3.8 | 3.8 |
| * Year-ended growth | ||||
| ^ Percentage point contribution to year-ended growth | ||||
Lower prices in the base year pushed the headline inflation upward
Monthly Inflation
The monthly headline inflation rate continued to decline over the month of July 2018 by 0.1% following a negative 2.5% in June 2018. This was largely attributed to favorable movements in the prices of both local and imported food over the month which outweighed a rise in various imported commodities. Consequently, the domestic component of inflation contributed a negative 0.4 percentage point to the monthly inflation rate which offset a 0.3 percentage point contribution from the imported component of inflation.
Domestic Prices
Over the month of July 2018, movements in the domestic prices was particularly on the local food items which decreased by 1.8% and drove the domestic prices lower by 0.9%. The continued increase in supply of local vegetables and fruits recorded a 4.8% decline in its prices and accounted for a negative 0.5 percentage point contribution. The prices of tomatoes, head cabbages, capsicum, pineapple, carrots and green coconuts had lower prices over the month. This outweighed an increase in the prices of meat, fish & poultry like eggs, tuna, octopus and cockles.
Imported Prices
The monthly imported inflation rose over the month by 0.6% due to an increase in the prices of tobacco and fuel. Upward revisions to the excise tax on imported tobacco drove its price higher by 6.8%, and contributed 0.3 percentage points to the monthly headline inflation. Additionally, the continued rise in fuel prices recorded a 1.4% rise in both prices of diesel and petrol. Movements in the prices of imported food was overall favorable in July. The removal of excise tax on chicken pieces drove its price lower by 7.1%. In addition, the decline in pices of imported fruits, vegetables and sugar was sufficient to outweigh the increase in prices of cereal products and dairy products like butter and margarine. A new excise tax was introduced on margarine and butter which contributed to the rise in its price.
Annual Inflation
Although the monthly inflation rate slightly declined over July 2018, the annual headline inflation increased to 6.1% from a 5.9% recorded last month. This was attributed to lower commodity prices in July 2017 compared to the current period. Therefore, the domestic component of inflation contributed 2.6 percentage points (increasing from 2.0 percentage points in June 2018) to the overall annual headline inflation rate while the imported component recorded a fall in its contribution (from 3.9 percentage points in the year to June 2018) to 3.5 percentage points in year ended July 2018.
Domestic Prices
Despite the continued favorable movement in the prices of local fruits and vegetables over the month, it reflects otherwise when compared to July 2017. As a result, the annual domestic inflation rate has increased to 6.2% compared to a 4.5% last month and 7.4% in July 2017 (Figure 4). The food category remained the highest contributor to the annual domestic inflation rate with 1.7 percentage points compared to 1.3 percentage points in June 2018. These are due to higher prices in agricultural crops, fish, and pastries (Table 1). The second highest contributor to the annual local inflation rate was the price of kava-Tonga with a 45.4% increase over the year and a 0.9 percentage points contribution. Other local goods which also increased included house maintenance goods and household furniture, furnishing & textiles. These outweighed the annual decline in public transportation and communication services.
Imported Prices
The annual imported inflation rate slowed to 6.0% in July 2018 after recording a 6.9% in June 2018 (Figure 5). Imported food prices continued to be the largest contributor which rose by 4.8% and contributed 1.4 percentage points to the overall annual headline inflation. From the food group, the dairy products category had the highest increase of 8.6%, followed by a 5.5% and 5.4% from the categories of meat, fish & poultry and other food components respectively. This outweighed a decline in the prices of fruits, vegetables and cereal products. Movements in the global price of meat and the excise tax on dairy products drove prices higher. The second highest contributor was a 1.3 percentage points from fuel which rose over the year by 17.3%. The cost of diesel and petrol increased over the year by 21.7% and 17.1% respectively. The high fuel prices were due to higher world oil prices which flow through to local oil prices with a lag of 1-2 months.
Additionally, imported tobacco and alcohol contributed 0.6 percentage points to the overall headline inflation mostly due to the increase in the price of tobacco. This was partly driven by the further increase in excise tax on tobacco that was introduced in July 2018. The price of Winfield blue rose over the year to June 2018 by 12.5%. Clothing supplies also increased by 5.2%. Household operation goods and services increased by 1.6% which included various goods such as kerosene, liquid petroleum gas, portable radio player and kitchenware. These outweighed the decline in the price of stationery supplies, medical health services and supplies and house maintenance goods.
Outlook
The Reserve Bank expects the annual headline inflation rate to fall to its 5% reference rate by the end of 2018 due to expectations that the prices of commodities will stabilize on an annual basis. However, adverse movements in global oil and food prices may change this outlook. Additionally, the vulnerability of Tonga to natural disasters also poses a risk to the local food supply and consequently its prices and the inflation outlook. According to the latest Climate Update1 from the Tonga Meteorological Service, rainfall is forecasted to be average to below average for Tonga in the near term which will be unfavourable for the local food supply.
1 - Issued on 7th August 2018
Inflation Releases
Inflation Releases for 2018
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July Released on 12 September 2018 | 239 KB |
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May Released on 20 August 2018 | 303 KB |
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June Released on 7 September 2018 | 230 KB |
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March Released on 29 June 2018 | 221 KB |
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April Released on 20 August 2018 | 308 KB |
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January Released on 6 April 2018 | 224 KB |
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February Released on 28 May 2018 | 216 KB |
Vehicle Registrations
June 2018
Released on 5 October 2018 | Download the complete release | 148 KB
| Jun 18 |
May 18 |
Apr 18 |
Mar 18 |
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| New Registrations |
301 | 391 | 246 | 332 |
Decline in taxi, rental and cars registrations pushed total vehicle registrations lower
The total vehicle registrations declined over the month of June by 90 registrations (23.0%), recording a total of 301 registrations. This is higher than the monthly average of 231 vehicles in the past five years. After the high number of registered taxis & rentals and cars last month, it contributed to the lower number of total registrations in June 2018. As a result, the registration of taxis & rentals and cars declined by 50 and 47 registrations respectively. However, the registrations of other vehicle types such as government and heavy vehicles slightly increased over the month.
Import payments for vehicles however rose over the month by $0.2 million (13.4%) coinciding with a rise in new commitment loans for vehicle by $0.2 million in June 2018 which may indicate a continued strong demand for vehicles.
Over the year to June 2018, the total number of vehicles registered declined by 11 (0.3%) registrations. The decline in the registration cars and other light vehicles, motorcycles and buses outweighed a rise in registration of heavy vehicles, government, taxis and rental vehicles. However, the payments for the import of vehicles recorded in the Overseas Exchange Transactions reports declined by $1.7 million (8.1%) over the year to June 2018. This reflects the popularity of people going overseas and buy their vehicles or receiving it as a form of gift from family members abroad.
Vehicle registrations are projected to increase in the near term. This is supported by the return of seasonal workers from Australia and New Zealand. Furthermore, locals’ preference for second hand cars ordered online from Japan is expected to remain high as the price is cheaper and the road conditions in Tonga are improving. Accordingly, the Reserve Bank’s liaison program reflects that the number of car dealers and vehicle businesses are increasing. These would support more imports of vehicles in the future.
Vehicle Registrations Releases
Agriculture Export Volumes
May 2018
Released on 22 August 2018 | Download the complete release | 198 KB
| May 18 |
Apr 18 |
Mar 18 |
Feb 18 | |
| Total volumes (tonnes) |
471.4 | 825.1 | 689.3 | 353.8 |
Volume of root crops push agricultural exports lower
May 2018 was not a favorable month for exported agricultural commodities as the total agricultural exports decreased over the month by 353.7 tonnes (42.9%). The volume of exported root crops declined significantly by 348.8 tonnes (45.4%). In this category, yam declined the most by 131.9 tonnes (35.6%) followed by a decline of 112.4 tonnes (50.7%) and 108.9 tonnes (62.7%) in taro and cassava exports respectively (Figure 1). Other exported agricultural crops which also declined over the month included breadfruit, plantain, brown coconuts and taro leaves. These outweighed a rise in the export of other crops such as sweet potato, watermelon, kava powder and green coconuts (Figure 1 & 2). The decline in the export of these crops was due to seasonality. Additionally, the export of cassava was expected to decline due to the impact of the damages caused by Tropical Cyclone (TC) Gita on the cassava plantations. The Consumer Price Index report released by the Statistics Department also suggested low supply of root crops as the prices of yam, cassava, and swamp taro increased over the month of May 2018.
However, the total agricultural proceeds increased by $0.7 million over the month to a total of $1.2 million (Figure 3). This may be due to lagged effects on the receipt of proceeds for agricultural exports.
In year ended terms, the total agricultural export volume rose by 1,918.1 tonnes (16.9%) (Figure 4), supported by better harvest of root crops which included taro and yam, the exports of squash products, coconuts, plantain, pele and taro leaves, mulberry juice, papaya, and kava-Tonga products. These offset the decline in the export volume of cassava, sweet potato, watermelon and breadfruit over the year. The continuous funding from the Government’s Development Loan scheme also supported the yearly growth in the agricultural sector. The annual agricultural export receipts however fell by $0.3 million (3.2%) which may be due to proceeds left abroad as well as the time lag effect of receiving it. The increase in non-commercial agricultural exports where individuals send crops to families abroad may have also contributed to the decline in the receipts of export proceeds.
On the outlook, the Reserve Bank anticipates that the volume of agricultural exports will decline in the short term due to the devastation and damages from TC Gita on the plantations. However, the Reserve Bank anticipates a positive growth in the agricultural sector in 2017/18 as TC Gita struck mid-way through the 2017/18 financial year hence losses are anticipated to be felt towards the latter part of the year. This is supported by the various initiatives from the Government to help growers, and the positive attitude reflected by growers through the Reserve Bank’s liaison program towards recovery and replanting of crops following the cyclone. According to the Climate Update1 from the Tonga Meteorological Service, rainfall is forecasted to be average to above average for Tonga in the near term which remains favourable for the local food supply. The weather uncertainties still remain a risk to the outlook.The total agricultural exports continued on a favorable trend over the month increasing by 135.7 tonnes (19.7%). This was mainly attributed to the harvest of various yam types and taro (tarua, swamp and giant taro) whose exports rose by 192.1 tonnes and 91.1 tonnes respectively during the month. Other exported agricultural crops which also increased over the month included breadfruit and taro tarua leaves. This was sufficient to outweigh the decrease in all other exported agricultural commodities such as cassava, coconuts, plantain, sweet potatoes and mulberry juice. According to the Consumer Price Index report released by the Statistics Department, the average monthly prices for yam and taro declined over the month whilst the price of cassava, coconuts and sweet potatoes increased. The movement in prices is associated with the supply of these crops. When there is abundant supply of a particular crops its price falls and vice versa when there is limited supply in the market.
Agriculture Export Volumes Releases
