2 Jun 2012

Tonga's Reserve Bank says decline in foreign currency stifles economy

4:49 am on 2 June 2012

Tonga's Reserve Bank governor, Siosi Mafi, says a continuing decline in foreign currency earnings is stifling the growth of the Tonga economy.

Matangi Tonga reports that remittances from Tongans living overseas, the main source of Tonga's foreign income, declined by 18 million US dollars last year, or more than 25 percent.

Miss Mafi says to boost foreign earnings more effort has to go into attempts to revitalize Tonga's main export industries, agriculture, fisheries and tourism.

She says government is heavily reliant on foreign aid and grants to build infrastructure such as roads and hospitals and balance the budget.

Miss Mafi says this is the second year that aid donors have provided budget support but she does not think it is a stable source of funds for Tonga.