TONGA EXPECTS LOW 1998 ECONOMIC GROWTH RATE

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NUKU'ALOFA, Tonga (May 10, 1998 - PACNEWS)---The indirect impact of the Asian economic crisis on Tonga's economy is expected to be reflected by a slightly lower growth rate and an increased current account deficit than originally anticipated for 1998. That's according to the just-released Tongan Reserve Bank's December 1997 quarterly bulletin, Radio Tonga reports.

It says the Tongan economy is mainly dependent on economic developments in Australia, New Zealand and the United States, and the expected lower growth rate in those countries are assumed to have some impact on the current account and the economic performance in Tonga.

The effects are projected to be mainly the result of lower remittance flows and tourist arrivals.

The bank says trade might be negatively affected through a slight deterioration of the country's competitive position as expressed in a strengthening of the trade-weighted exchange rate.

Most overseas Tongans live in New Zealand, Australia and the U.S., from where the bulk of the annual remittances originate.

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