Tonga Economy Profile 2008

Economy - overview

Tonga has a small, open, South Pacific island economy. It has a narrow export base in agricultural goods. Squash, vanilla beans, and yams are the main crops, and agricultural exports, including fish, make up two-thirds of total exports. The country must import a high proportion of its food, mainly from New Zealand. The country remains dependent on external aid and remittances from Tongan communities overseas to offset its trade deficit. Tourism is the second-largest source of hard currency earnings following remittances. The government is emphasizing the development of the private sector, especially the encouragement of investment, and is committing increased funds for health and education. Tonga has a reasonably sound basic infrastructure and well-developed social services. High unemployment among the young, a continuing upturn in inflation, pressures for democratic reform, and rising civil service expenditures are major issues facing the government.

GDP (purchasing power parity)

$877 million (2006 est.)

GDP (official exchange rate)

$219 million (2007 est.)

GDP - real growth rate

-3.5% (2007 est.)

GDP - per capita (PPP)

$2,200 (2005 est.)

GDP - composition by sector

agriculture: 25%
industry: 17%
services: 57% (FY05/06 est.)

Population below poverty line

24% (FY03/04)

Household income or consumption by percentage share

lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices)

11.1% (2005 est.)

Labor force

33,910 (2003)

Labor force - by occupation

agriculture: 65%
industry and services: 35% (1997 est.)

Unemployment rate

13% (FY03/04 est.)

Budget

revenues: $80.48 million
expenditures: $109.8 million (FY07/08)

Industries

tourism, construction, fishing

Industrial production growth rate

1% (2003 est.)

Electricity - production

54 million kWh (2006)

Electricity - consumption

47 million kWh (2006)

Electricity - exports

0 kWh (2005)

Electricity - imports

0 kWh (2005)

Oil - production

0 bbl/day (2007 est.)

Oil - consumption

880 bbl/day (2005 est.)

Oil - imports

842.3 bbl/day (2004)

Oil - exports

0 bbl/day (2007 est.)

Oil - proved reserves

0 bbl (1 January 2007 est.)

Natural gas - production

0 cu m (2007 est.)

Natural gas - consumption

0 cu m (2007 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

0 cu m (2007)

Natural gas - proved reserves

0 cu m (1 January 2007 est.)

Current Account Balance

-$25.2 million (FY06/07)

Agriculture - products

squash, coconuts, copra, bananas, vanilla beans, cocoa, coffee, ginger, black pepper; fish

Exports

$22 million f.o.b. (2006)

Exports - commodities

squash, fish, vanilla beans, root crops

Exports - partners

US 39.7%, Japan 27.8%, NZ 8.2%, South Korea 7.6% (2006)

Imports

$139 million f.o.b. (2006)

Imports - commodities

foodstuffs, machinery and transport equipment, fuels, chemicals

Imports - partners

Fiji 30.3%, NZ 27.7%, US 8.2%, Australia 7.5%, France 5.7%, UK 4.7% (2006)

Reserves of foreign exchange and gold

$40.83 million (yearend, FY04/05)

Debt - external

$80.7 million (2004)

Market value of publicly traded shares

$NA

Economic aid - recipient

$31.75 million (2005)

Currency (code)

pa'anga (TOP)

Exchange rates

pa'anga per US dollar - NA (2007), 2.0277 (2006), 1.96 (2005), 1.9716 (2004), 2.142 (2003)

Fiscal year

1 July - 30 June