28 Mar 2013

ADB says hefty loan repayments could affect delivery of basic services in Tonga

2:40 pm on 28 March 2013

The long term debt outlook for Tonga is extremely poor with growing levels of repayments to be met over the next four years.

In its latest projections the Asian Development Bank has raised concerns about the government's ability to maintain basic services.

The ADB says without further budget support, the government will be unable to maintain services.

It says the biggest handicap is the large public service wage bill, which is about 51 percent of the national budget.

The critical matter for Tonga are repayments of a huge Chinese loan beginning later this year.

The government has in place a No New Loans Policy.