World Bank Governor's Statement No. 12 - Statement by the Hon. Tiofilusi Tiueti, Governor of the IBRD for Tonga - Overview of Tonga’s 2023 Annual Meetings Remarks

Jul 19, 2026

The statement delivers Tonga’s assessment to the World Bank Group and IMF governors at the 2023 Annual Meetings, outlining post-disaster economic recovery after the 2022 shocks. It describes growth and inflation dynamics alongside the need for coordinated monetary and fiscal policies to protect development and vulnerable households. The remarks emphasize climate resilience in the face of cyclones, sea-level rise, and disaster risk, calling for flexible climate finance and technical support. It also discusses financial constraints, reconstruction priorities, anti-money-laundering impacts on correspondent banking, and reforms supported by technology for more accessible electronic payments and financial services.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages4

Reading Time10 min

Introduction

Economic Recovery and Challenges

Monetary tightening and fiscal protection

Climate Resilience

Calls for technical support and flexible climate finance

Financial Constraints and Reforms

Anti-money laundering and correspondent banking

Digital payments and financial inclusion

Public Disclosure Authorized Public Disclosure Authorized World Bank Governor's Statement No. 12 October 13, 2023 Statement by the Hon. TIOFILUSI TIUETI, Governor of the IBRD for TONGA Statement by the Hon. Tiofilusi Tiueti, Governor of the IBRD for Tonga Mr. Chairman, Mr. President of the World Bank Group, Madame Managing Director of the International Monetary Fund, Fellow Governors, Distinguished delegates, Ladies and Gentlemen, Introduction I am honored to address the esteemed Governors on behalf of the Government of Tonga at the 2023 Annual Meetings of the International Monetary Fund (IMF) and World Bank Group (WBG) . Our heartfelt thanks go to the Kingdom of Morocco for their warm hospitality, which profoundly inspired our delegation, especially considering their resilience in the face of recent challenges, notably the earthquake. Economic Recovery and Challenges Tonga faces a challenging road ahead. After enduring the double disasters of 2022, Tonga’s economy has successfully rebounded in FY2023 after consecutive contractions in the last two years. Growth is estimated at 2 .5% for FY 2023 and forecasted to grow an average of 2.6% in the near term. However, persistent challenges will be crippling our development effort in the medium to long-term including, high domestic inflation, vulnerability to climate change, natural disasters, the energy price crisis, and geopolitical tensions like the recent Israel conflict. Headline inflation has eased from its peak of 14% in September 2022 to 7.4% in June 2023 and down to 2.8% in August 2023 , a significant reduction below the 5% reference rate in the second half of 2023 (first time since May 2021) . Although imported inflation has eased, domestic inflation continues on an upward trend and has remained relatively high over 8 percent in August 2023 which requires ongoing monetary policy measures. The pace and magnitude of monetary tightening is carefully monitored by the Reserve Bank to ensure the undue output cost is minimized from slowing down our economic recovery priority. On the fiscal side, the Government continues to protect its affected economic sectors, which are the backbone of its development, and the most vulnerable citizens of the country by implementing prudent fiscal measures appropriate to safeguard them against current and potential challenges going forward. Strong coordination of the monetary and fiscal policies will aid to uphold Tonga’s economy in the medium to longterm. Climate Resilience Given Tonga’s high multi-hazards exposure and increasing susceptible to natural disasters, such as cyclones and rising sea levels due to climate change; building climate resilience is vital to safeguard lives, infrastructure, and the ecosystems. Whilst Government established clear policies and regulations to guide the risk reduction, allocation and utilization of climate finance, tailoring financing instruments to address local challenges, such as coastal erosion or agricultural adaptation, enhances the effectiveness of climate finance interventions has been challenging. Hence, we call on the two Banks and other International Financial Institutions (IFIs) to provide technical support on existing climate facilities (and potential facilities) with flexible terms and conditions that is accessible to us in the near term to help strengthen Tonga’s climate resilience effort. Financial Constraints and Reforms In view of the importance of the reconstruction and building back better the resilience effort of the country and given that building and investing in Tonga’s climate resilience requires unprecedented increase in investment to match Tonga’s multiple exposure to hazard risks. The Government continues to explore proactive measures to manage those risks and seek additional grant financing from its development partners , led by the World Bank, to ensure that debt remains on a sustainable path, while trying to meet other Government priority d

FAQs

What economic recovery and growth outlook does Tonga report for FY2023?

Tonga reports a rebound in FY2023 after consecutive contractions, with growth estimated at about 2.5% for FY2023 and forecasted to average about 2.6% in the near term.

Which major challenges does the statement highlight beyond recovery?

It highlights high domestic inflation, vulnerability to climate change and natural disasters, energy price crisis pressures, and geopolitical tensions, including the recent Israel conflict.

What climate resilience actions and financing support does Tonga request?

Tonga stresses building resilience for lives, infrastructure, and ecosystems and calls on the World Bank and other IFIs to provide technical support and flexible climate financing terms accessible in the near term.

Jul 19, 2026

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