Economy of Tonga
A Tongan coin
Currencypa'anga (T$)
1 July – 30 June
Trade organisations
none
Statistics
GDP
  • Increase $0.488 billion (nominal, 2018)[1]
  • Increase $0.617 billion (PPP, 2018)[1]
GDP rank187th (nominal) / 183rd (PPP)
GDP growth
  • 4.7 (2016) 2.7% (2017)
  • 1.5% (2018) 3.5% (2019e)[1]
GDP per capita
  • Increase $4,858 (nominal, 2018)[1]
  • Increase $6,148 (PPP, 2018)[1]
GDP by sector
agriculture: 20.4%, industry: 18.6%, services: 61% (2011 est.)
2.914% (2018)[1]
Population below poverty line
16% (FY09/10)
Labour force
47,320 (2011)
Labour force by occupation
agriculture 31.8%, industry 30.6%, services 37.6% (2003 est.)
Unemployment8% (FY09/10)
Main industries
tourism, construction, fishing
85th (2017)[2]
External
Exports$62 million (f.o.b., 2010)
Export goods
squash, fish, vanilla beans, root crops, domain names
Main export partners
 South Korea 17.8%
 United States 16.4%
 New Zealand 15.1%
 Fiji 10.9%
 Japan 9.2%
 Samoa 9.1%
 American Samoa 5.8%
 Australia 5.0% (2012 est.)[3]
Imports$92 million (f.o.b., 2010)
Import goods
foodstuffs, machinery and transport equipment, fuels, chemicals
Main import partners
 Fiji 38.0%
 New Zealand 23.5%
 United States 10.1%
 China 9.9% (2012 est.)[4]
Public finances
$50 million (2010)
Revenues$109.5 million (2011 est.)
Expenses$109.5 million (2011 est.)
Economic aidAustralia $5.5 million, New Zealand $2.3 million (FY01/02)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Tonga's economy is characterized by a large nonmonetary sector and a heavy dependence on remittances from the half of the country's population that lives abroad, chiefly in Australia, New Zealand, and the United States. Much of the monetary sector of the economy is dominated, if not owned, by the royal family and nobles. This is particularly true of the telecommunications and satellite services. Much of small business, particularly retailing on Tongatapu, is now dominated by recent Chinese immigrants who arrived under a cash-for-passports scheme that ended in 1998.

The manufacturing sector consists of handicrafts and a few other very smallscale industries, all of which contribute only about 3% of GDP. Commercial business activities also are inconspicuous and, to a large extent, are dominated by the same large trading companies found throughout the South Pacific. In September 1974, the country's first commercial trading bank, the Bank of Tonga, opened.

Rural Tongans rely on plantation and subsistence agriculture. Coconuts, vanilla beans, and bananas are the major cash crops. The processing of coconuts into copra and desiccated coconut is the only significant industry. Pigs and poultry are the major types of livestock. Horses are kept for draft purposes, primarily by farmers working their api. More cattle are being raised, and beef imports are declining.

Tonga's development plans emphasize a growing private sector, upgrading agricultural productivity, revitalizing the squash and vanilla bean industries, developing tourism, and improving the island's communications and transportation systems. A small but growing construction sector is developing in response to the inflow of aid monies and remittances from Tongans abroad. The copra industry is plagued by world prices that have been depressed for years.

Efforts are being made to discover ways to diversify. One hope is seen in fisheries; tests have shown that sufficient skipjack tuna pass through Tongan waters to support a fishing industry. Another potential development activity is exploitation of forests, which cover 35% of the kingdom's land area but are decreasing as land is cleared. Coconut trees past their prime bearing years also provide a potential source of lumber.

The tourist industry is relatively undeveloped; however, the government recognizes that tourism can play a major role in economic development, and efforts are being made to increase this source of revenue. Cruise ships often stop in Nukuʻalofa and Vava'u.

According to the CIA World Factbook,

The Tongan economy's base is agriculture, which contributes 30% to GDP. Squash, coconuts, bananas, and vanilla beans are the main crops, and agricultural exports make up two-thirds of total exports. The country must import a high proportion of its food, mainly from New Zealand. The industrial sector accounts for only 10% of GDP. Tourism is the primary source of hard currency earnings. The country remains dependent on sizable external aid and remittances to offset its trade deficit. The government is emphasizing the development of the private sector, especially the encouragement of investment.

Energy

Electricity – production: 53 GW·h (2008)

Electricity – production by source:

Electricity – consumption: 38,13 GW·h (2003)

Electricity – exports: 0 kW·h (2003)

Electricity – imports: 0 kW·h (2003)

In 2021 the Tongan government committed to a target of 70% renewable energy by 2030.[5]

In July 2012 Tonga Power opened Tonga's first solar photovoltaic generator, the 1.32 MW Maama Mai Solar Farm on Tongatapu.[6][7] This was followed by a 6MW solar farm spread across three sites on Tongatapu.[8] A pair of 13 MW / 24 MWh grid batteries began operating on the main island in 2022.[9] An Outer Islands Renewable Energy Project is installing solar / battery systems on nine smaller islands, and upgrading the electrical grids on 'Eua and Vava'u.[10]

Other data

Agriculture – products: squash, coconuts, copra, bananas, vanilla beans, cocoa, coffee, ginger, black pepper; fish

Tonga produced in 2018:

In addition to smaller productions of other agricultural products.[11]

Currency: 1 pa'anga (T$) = 100 seniti

Exchange rates: pa'anga (T$) per US$1 – 1.9716 (2004), 2.142 (2003), 2.1952 (2002), 2.1236 (2001), 1.6250 (November 1999), 1.4921 (1998), 1.2635 (1997), 1.2323 (1996), 1.2709 (1995)

References

  1. 1 2 3 4 5 6 "World Economic Outlook Database, October 2019". IMF.org. International Monetary Fund. Retrieved 21 October 2019.
  2. "Ease of Doing Business in Tonga". Doingbusiness.org. Retrieved 25 January 2017.
  3. "Exports Partners of Tonga". CIA World Factbook. 2012. Archived from the original on 13 June 2007. Retrieved 1 August 2013.
  4. "Imports Partners of Tonga". CIA World Factbook. 2012. Archived from the original on 13 June 2007. Retrieved 1 August 2013.
  5. "Tonga commits to achieve 70% renewable energy target by 2030". Pacific R2R. 14 January 2021. Retrieved 5 November 2022.
  6. "Maama Mai Solar". Tonga Power. Retrieved 5 November 2022.
  7. "Maama Mai solar farm". Meridian Energy. Retrieved 5 November 2022.
  8. "Tonga solar farm online after PSDI's PPP assistance". PSDI. 24 August 2022. Retrieved 5 November 2022.
  9. Colthorpe, Andy (25 October 2022). "Tonga's first large-scale battery systems take country closer to achieving NDC climate targets". Energy Storage News.
  10. "Renewable energy project installing solar power systems on nine outer islands". Matangi Tonga. 27 June 2022. Archived from the original on 27 June 2022.
  11. Tonga production in 2018, by FAO
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