economy

Hipkins and new Deputy Prime Minister Carmel Sepuloni will take the reins on Wednesday, following Jacinda Ardern's sudden announcement last week she was quitting after a challenging five years in the top role.

The Board of Directors of the National Reserve Bank of Tonga decided to continue with the current measures at its meeting last week.

According to central bank, this is to encourage utilization of the excess liquidity in the banking system, through further lending to growth sectors and to support the economy from the impacts of COVID-19.

The monetary policy rate will be maintained at 0% (zero interest rate policy), minimum loans/deposit ratio of 80%, Statutory Reserve Deposit ratio at 10%.

Other measures are:

The Prime Minister, who holds a Doctorate of Christian Ministry from Faith Evangelical Lutheran Seminary in the United States, said the kingdom’s budget relied heavily on God.

According to Kaniva News, Mr Tu’i’onetoa made the claim in his New Year’s address, which was transmitted by Broadcom.

He said the projected budget deficit would be less than the forecast TP$60 million.

The nation’s financial status would be better, he said.

The grant of US$5.5 million is the last in a series of three operations and it was approved by the World Bank’s Board of Executive Directors.

“The government of Tonga is continuing its work to deliver real reform that will bring better outcomes for people across our Kingdom – guided by our Strategic Development Framework 2015-2025, which was created in partnership with civil society and the private sector,” said Dr. Pohiva Tu'i'onetoa, Tonga’s Minister for Finance.

The Governor of the Reserve Bank, Sione Ngongo Kioa, said the total export volume of agricultural products declined.

Kaniva News reports consumption also fell and the Consumption Tax collected over the month declined in line with a fall in total business sales.

Electricity consumption declined, which indicated a slowdown in economic activities.

Elsewhere, economic indicators of the tertiary sector were mixed over the month with prominent results from the banking sector reflected in the banking system’s improving profitability.

According to the National Reserve Bank it will reduce financial growth in the short term, but will also boost foreign reserves.

The Governor of the Reserve Bank, Dr. Sione Ngongo Kioa told the bank’s board of directors’ meeting earlier this month that domestic economic activities in February 2018 were affected by the devastation by tropical cyclone Gita.

Kioa said this would also be reflected in the economic activities of upcoming months.

According to the ADB’s latest Pacific Economic Monitor, inflation will remain unchanged at 2.5% and the GDP will grow from 2.8% to 3.5% in 2018.

However, the ADB also warned that Tonga ranked second highest country (behind Vanuatu) at risk from natural disasters.

Kaniva News reports Tonga’s location exposed it to a higher chance of natural disaster.

Its placing was also determined by its ability to cope with a disaster and to adapt in the aftermath.

Bloomfield said it was time to stop relying on solutions from economic textbooks.

As Kaniva News reported last month, the government announced that from now on budgets would be set according to a policy of aligning expenditure with GDP ratios.

“This problem has been raised from time to time and people are sick of it,” Bloomfield said.

He said economic policy was the cause of the civil servants’ strike in 2005.

Budget allocation should reflect activities and solution to stop these problems.

As vote counts trickled in from five state elections on Saturday, one result loomed large: that of central India's Uttar Pradesh, home to more than 200 million people. The staggered five-week vote in that state alone marks the biggest election in the world in 2017.

Modi's ruling Bharatiya Janata Party, or the BJP, looks poised to take about 75% of the 403 seats on offer in Uttar Pradesh.

Government estimates project GST to haul in K1,484.7 million (K1.5 billion) of the overall Tax on Goods and Services predicted revenue of K2,762.2 million (K2.8 billion).

The Tax on Goods and Services will also comprise of K691.1 million in Excise Duty, Import Excise of K300.3 million and K180.5 million in Gaming Machine Turnover Tax.

The Government states that the gradual increase in commodity prices and in the agriculture and mining sector in 2017 are expected to support income and spending on goods and services in the economy.