The Tongan economy will grow by only 0.3% in 2014, according to the Asian Development Bank Outlook ADO Update 2013 that was published this week.

Remittance prospects remain low in the ADO forecast for Tonga for the 2014 Financial Year, when only a few infrastructure projects financed by development partners have been confirmed for implementation.

Tonga's economic growth has been on a downward spiral since 2011. In 2012 it grew by 0.8%, then this year it has grown by only 0.5%.

The Asian Development Bank Outlook Update attributed Tonga's economic decline to a number of factors, including:

• a decline in Private Sector credit (lack of working capital)
• a drop in business loans by 14.3%
• stagnant  foreign remittances
• a decline in household loans by 0.8%
• an increase in non-performing loans to 14.9% of all loans in March 2013
• a 50% drop in arrivals aboard cruise ships and yachts.

However arrivals by air increased by 9% and there was a 27% increase in tourism receipts, suggesting that expenditure per tourists visiting Tonga has increased.