The following represents a general Table of Contents outline for the Country Economic Forecast.
The actual report may cover any or all of the topics listed below.
- Highlights and Key Issues - four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview - Forecast Table showing % changes for the country - with 2 years of historical data and 4 years of forecast data for the following:
- Domestic demand - Private consumption - Fixed investment - Stockbuilding (% of GDP) - Government consumption - Exports of goods and services - Imports of goods and services - Unemployment - Consumer prices - Current account balance (US$ and % of GDP) - Government budget (% of GDP) - Short-term interest rates (%) - Long-term interest rates (%) - Exchange rate (vs. US dollar) - Exchange rate (vs. euro) - Economic Overview - two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts - Charts and Tables - covering a full range of economic developments relevant to the time period covered.
These could include such topics as:
- Contributions to GDP growth - Monthly industrial output - Business and consumer confidence - Unemployment rate - Retail sales - Prices and earnings - Consumption and investment - Government balance and debt - GDP and industrial production - Monetary policy and bond yields - Background Information on the country - One or two pages of text covering the main historical political and economic factors that determine the country's current position - Key Facts on the country - Map of the country - Key political facts - Long-term economic and social development - changes since 1980 - Structure of GDP by output - latest year - Long-term sovereign credit ratings and outlook - Corruption perceptions index- latest year - Structural economic indicators - changes since 1990 - Destination of goods' exports -prior years - latest year - Composition of goods & services exports - latest year
We have lowered our GDP growth forecast in 2014 from 1.3% to 1%, due to weaker remittance inflows and the impact on tourism of New Zealand's negative comments last year about the safety of travelling in Tonga (focused on ferry journeys and domestic air flights). In 2011/12, New Zealand accounted for some 25% of visitors to Tonga (by air). Meanwhile, fiscal austerity aimed at shrinking the government's budget deficit (which opened up after the global crisis) and keeping public debt below 40% of GDP, will be a dampening factor on consumption and investment throughout the forecast period. The supply of credit to households and businesses will also be very sluggish, holding back growth, due to the large stock of non-performing loans in the system. Given these negative factors, we expect the Tongan economy to grow by only 2-2.5% a year in 2015-17. Moreover, the risks to the outlook appear to be generally on the downside. Tonga already has a high level of external indebtedness and the substantial current account deficit – estimated at over 18% of GDP in 2013 and forecast to fall only slowly – will push debt steadily higher over the coming years. In addition, deteriorating investor sentiment about emerging economies in general in the near term may make it more difficult to attract external financing and could lead to some capital outflows. But as the world economy recovers in the coming years, we expect export growth to pick up steadily. Rising electricity prices contributed to pushing up CPI inflation from a Q2 2013 low of 0.1%; however, in 2013 as a whole inflation probably averaged 0.8%. As the economy gradually speeds up and world commodity prices start rising, inflation is forecast to return to its long-term trend of about 5% in 2015-17.