Tonga is in a high-risk exposure position “to weather disturbances and sea-level rise as well, as weak disaster management” stated the December 2018 issue of the Pacific Economic Monitor (PEM) of the Asian Development Bank.

According to PEM, tropical Cyclone Gita that hit Tonga in February 2018 was the most destructive weather disturbance to hit the Kingdom. Gita cost the Tongan economy an estimated $USD164.3 million, equivalent to 37.9% of Tonga’s Gross Domestic Products. The reconstruction following cyclone Gita also increased borrowing, contributing to Tonga’s latest debt-to-GDP ratio of 43.2%.

While there is a concern over Tonga’s increased external borrowing, a new Tonga Foreign Exchange Control Act 2018 was enacted on 1 November to ensure that Official Foreign Reserves held by the National Reserve Bank of Tonga (NRBT) was enough to sustain seven months of imports.

Foreign reserves held by the NRBT in October was $457.3 million, equivalent to 7.3 months of imports.