The banks’ total lending declined by $2.5 million(0.5%) over the month of June 2020, as a result of lower business and household loans. This reflects stagnant credit growth and the normal monthly repayment reducing the outstanding loans balances. Read more on the Banking Sector Development for June 2020.

The Overseas Exchange Transactions (OET) balance recorded its highest monthly surplus of $54.2 million in June 2020 compared to a $14.5 million surplus last month. This was fuelled mainly by the influx of transfer receipts. Read more in the Overseas Exchange Transactions of June 2020.

Despite expectations of a downturn due to the impacts of COVID-19, Tonga’s remittance persistently remains at very high levels over the past few months to July 2020. Read more in the Remittance for July 2020.

The cancellation of major events such as the Royal Agricultural Show and the Heilala Week Festival for 2020, diminishes what normally would have been a vibrant month for domestic activities, as visitors arrive in Tonga for the mid-year school holidays and to attend the festivities.

Electricity Consumption & Production for 2015

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June 2018


Released on 5 October 2018 | Download the complete release | pdfIcon 163 KB


  Jun 18
May 18
Apr 18
Mar 18

Total Volume (metric tons)
9.3 81.4 8.3 51.4
Tuna 1.1 53.6 4.4 39.9
Snapper 8.1 8.8 3.9 5.2
Others 0.1 19.1 0.0 6.4
Aquarium Products (pieces)
28,449 15,465 17,559 34,352

Note: Numbers may not add up to the total volume due to rounding error.

Exported Aquarium trends favourably over the month

Aquarium exports

The total aquarium exports increased by 84.0% over the month of June 2018. Higher exports over the month was due to a rise in all types of exported aquarium products which includes invertebrate, live hard and soft coral, shellfish and live fish. The amount of aquarium exports picked up since the beginning of 2018 and liaison suggests that this was due to new market opportunities abroad which exporters are now trying to meet demand from their respective buyers.

Additionally, the total exported aquarium products rose over the year by 60,974 pieces (49.0%) mainly driven by a 60,163 pieces (88.7%) increase in exported invertebrates. This was followed by a rise in live hard coral and shell fish which outweighed a decline recorded for live fish and soft coral over the year.

Marine products

The total exported marine products1 declined over the month by 72.1 metric tons (88.6%) as all varieties of exported fish decreased over the month such as tuna, shark meat and snapper. The very low exports during June 2018 was due to no foreign fishing vessel. However, in comparison to April 2018 where no foreign fishing vessel returned with their catch, the total volume of exported marine product in June is higher by 1.0 metric tons attributed to catch of local fishing vessels.

Additionally, the total exported marine products declined by 1,414.2 metric tons (54.2%) over the year to June 2018 largely driven by a 1,361.5 metric tons (57.4%) decrease in tuna exports due to lower number of foreign vessels registered to fish the Tongan waters. This was followed by a 69.7 metric tons and 37.3 metric tons fall in the export of snapper and shark meat respectively which outweighed a rise in the volume of exported seaweed.

Export Proceeds

The total receipts for exports of all fisheries products as reported by the banking system doubled over the month of June recording a total $0.6 million. This coincided with the rise in aquarium exports, it could also reflect the advance payment of fisheries export for the upcoming month (Figure 3).  The United States remained the highest source country for these marine exports receipts followed by Hawaii, Australia, South Korea, the Euro Area and Japan. In year ended terms, total marine export proceeds declined by $3.2 million (36.1%) to a total of $5.6 million coinciding with the annual decline in marine exports.

Outlook

The Reserve Bank expects continues to expect that the volume of fisheries export to decline in the near term due to less foreign vessels with higher operation capacity which are available to fish the Tongan waters. However, the on-going initiatives from the Ministry of Fisheries may help to increase and sustain the supply of fisheries products. Additionally, the sector benefits from the duty exemptions policy on oil and fishing gear and the initiatives of Fisheries Development and Export Fund (FDEF) by the Government through its Government Development Loans facilitated by the Tonga Development Bank will also support growth in the Fisheries sector. However, adverse weather and damage to boats remains the largest risk to potential growth of the sector.


1 - Excluding aquarium products


Marine Exports Volume Releases

June 2018


Released on 7 September 2018 | Download the complete release | pdfIcon 169 KB


  Jun 18
May 18
Apr 18
Mar 18

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

Fuel Prices for 2015

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Fuel Prices Archives

July 2018


Released on 12 September 2018 | Download the complete release | pdfIcon 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

June 2018


Released on 5 October 2018 | Download the complete release | pdfIcon 148 KB


  Jun 18
May 18
Apr 18
Mar 18

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

May 2018


Released on 22 August 2018 | Download the complete release | pdfIcon 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

Electricity Prices for 2015

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January 2018


Released on 26 June 2018 | Download the complete release | pdfIcon 190 KB


  Jan 18
Dec 17
Nov 17
Oct 17

Total Arrivals
12,475 13,036 9,210 10,556
Total Departures
15,502 10,201 9,603 10,974

Note: Total Arrivals & Departures including air, cruise ship and yacht arrivals & departures.
Source: Statistics Department

Departures soar as visitors return whilst arrivals decline

Total international departures climbed over January due to the end of the festive season thus visitors returning to their respective countries of residence. This recorded an increase of 5,301 passengers (52.0%) leaving the Kingdom over the month and majority of the total international departures were cruise ship departures (3,349 passengers) followed by those travelling by air (1,983 passengers). This coincides with the arrival of three cruise ships during the month. Majority of the passengers departing Tonga were visitors and returned to New Zealand, Australia and the United States of America. This is inline with the high number of visitors last month who arrived in the Kingdom and from the same aforementioned countries. The high level of departures could be explained by the concluding of the festive season which included family reunions and conferences.

Meanwhile, the total international arrivals declined by 561 passengers (4.3%). The fall was led mainly by a decrease in air arrivals followed by yacht arrivals. Ship arrivals, however, rose over January due to the arrival of three cruise ships. Total international arrivals declined reflecting the rate of departures from the Kingdom. This mainly noted a fall in arrival of visitors as well as yacht visitors which had offset a rise in the arrival of Tongan residents who returned home following the holiday season. Additionally, the decline in air arrivals had also offset the rise in cruise ship arrivals during January.

Travel receipts, however, increased by $0.2 million (1.9%) to a total of $10.3 million over January. Despite this movement not coinciding with the total number of international arrivals throughout the month, the arrival of three cruise ships and further a total of 4,855 visitors being in the country during January may have likely contributed to the higher travel receipts.

Over the year, the total number of international departures rose by 2,033 passengers (1.6%). This is the normal annual trend for the past three years. More specifically, international air departures remained the main mode of transport significantly driving the overall rise in total number of international air departures over the year. Total international arrivals rose by 1,840 passengers (1.5%) over the year mainly due to an increase in air arrivals whilst ship arrivals declined. The higher number of arrivals coincided with an increase of $14.4 million (14.5%) in travel receipts. This was likely to have also supported the transportation, trade and other sectors of the economy.

Outlook

The activities in the tourism sector are anticipated to remain vibrant in 2017/2018. The Reserve Bank will continue to closely monitor the developments in the international arrivals and its impact on the tourism and other sectors.


International Arrivals & Departures Report Releases

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