Vanuatu has maintained macroeconomic stability, but real GDP growth slowed despite the receipt of considerable foreign assistance and the implementation of structural reforms under the Comprehensive Reform Program (CRP). A sharp increase in liquidity, a consequent bulge in consumption, and a rise in imports have affected Vanuatu's recent economic performance. Inflation, as measured by the consumer price index for the main urban centers, has remained moderate in recent years. The paper also discusses prices and population, financial sector, and external sector developments of Vanuatu.
This paper describes economic developments in Tonga during the 1990s. From 1993 to 1996, financial policies were quite expansionary. Following the licensing of two new banks, credit growth accelerated in 1994. The National Reserve Bank of Tonga initially adopted an accommodating stance, but in December 1995, tightened monetary policy significantly. Hampered by its poor profitability in the use of indirect monetary instruments, it relied on an increase in reserve requirements. Meanwhile, fiscal policy had added further to demand pressures with the recurrent budget surplus declining, owing to a cost-of-living adjustment to government wages.