The latest economic data from the Asian Development Bank shows the incoming Tongan government will need to make tough decisions to turn its struggling economy around.
The ADB's Pacific Economic Montior report says fiscal pressures could threaten Tonga's long-term social and development goals in the coming year.
A senior country specialist for the ADB in Suva, Emma Veve, says the economy in Tonga along with that of Fiji, Kiribati and Tuvalu, is very concerning and development partners have offered support.
She says Tonga has been hit by a drastic fall in remittances since the global financial crisis when previously they provided up to a third of the country's economic activity.
However September figures indicate remittances and tourism have picked up a little, but loans to businesses fell.
"Things in the coming year will certainly be better than they have been this year. But its still a set of difficult decisions facing the incoming government about what areas of expenditure to prioritise and how to lift revenue over the long term to meet the investment needs of government."
Emma Veve says Tonga is not in a position to take on more loans but the ADB does provide grant financing for projects such as infrastructure development.