A rise in Tonga's Gross Domestic Product in the coming years will be driven primarily by the reconstruction of Ha'apai, according to the IMF 2014 Article IV consultation report on Tonga.

Tonga's Gross Domestic Product (GDP) is projected to grow by 1.5% during the rest of the 2013-2014 Fiscal Year, then by 3.5% in 2014-2015, according to the International Monetary Fund IMF 2014 Article IV Consultation report on Tonga that was released on Wednesday, 30 April.

The projected steadily growth in Tonga's GDP between 2013-2015 will be driven primarily with a steady flow of foreign grants and aid money for the reconstruction of Ha'apai after it was devastated by Cyclone Ian in early January.

In addition to grants and aid money for Ha'apai reconstruction, there is also a government loan of $10 million Pa'anga from the World Bank. The loan with an interest rate of 0.5% is to be repaid in 40 years has a grace period of 15 years.

Other possible contributors to the growth of the GDP included a possible rebounding of agriculture, tourism, other sector, and Tonga's preparation to host the 2019 South Pacific Games.

The report however warned that the 2019 Games could potentially pose risks to fiscal sustainability, and it recommended streamlining the Games to guard against such risks.

It also recommended wage restraint and revenue reform, including broadening the Consumption Tax base.

The broadening of the Consumption Tax base, according to the CEO of the Ministry of Finance, Tatafu Moeaki means that there will be no increase in the CT but it will be broadened to income earners who at the moment were not paying CT.

Moeaki also raised a point that there was a bigger growth in the Gross National Products than the Gross Domestic Products, and he pointed to the increasing construction of private homes and small business, funded by overseas Tongans.

The report praised the government for their intention "to gradually phase out existing ad-hoc tax incentives  . . . will help enhance the transparency and discipline of tax expenditures."

The IMF team who were in Tonga for a fortnight were: Mr Jookyung Ree, Group Leader; Christiane Kneer and Fei liu, assistant.