He was addressing the opening of the country's newly elected Parliament which was via livestream from his royal residence on the island of 'Eua on Tuesday 12 January.
"The challenge for the future is clear. We must prioritize our development goals because there are never enough resources for all our needs", he said.
"In order to advance we must have an accounting of where the nation is financially now. Our local market cannot sustain our balance of payments."
Tupou VI has urged the new Parliament to focus on facilitating Tonga's local economy, which has suffered from Covid restrictions and which has long struggled with a dependency on food and fuel imports.
"Fuel can be offset to a certain extent with renewable energy priorities but Government must support local production of foods, legislate and protect fledging primary industries like Agriculture and Fisheries. Indeed it must prioritise private sector led development as clearly and jointly stated by our development partners and ourselves."
The 2022 opening of parliament officially marks the first day of work for Tonga's incoming Prime Minister Siaosi Sovaleni. He ousted incumbent Pōhiva Tu'i'onetoa following national elections held late last year, which saw 12 new MPs elected to Tonga's 26 seat parliament.
Tupou VI's speech was far more positive than his 2021 address when he scolded the house for "failing to fulfil its responsibilities" and charged the incumbent administration with disrupting the private sector and interfering with the daily operations of private businesses and public boards.
"The challenge for the duration of this next election period is clear. How we are to answer those challenges should be formulated and led by this Government but they must be discussed and accountable in how they are implemented here in Parliament."
Tonga parliament convenes for its first parliamentary session on Thursday where MPs will take their oaths and to elect a Chairman of the Whole House Committee and members of the Standing Committees of the House. A response to the King's speech is expected to be tabled and submitted.