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BPNG forecasts low economic growth for PNG

Staff Reporter 4/03/2016 | | |
THE Bank of PNG says real gross domestic product is projected to be 4.3 per cent as per the 2016 National Budget.

This affirms the projections that Asian Development Bank had announced last week and while releasing its flagship report in Sydney.

ADB’s senior Pacific economist Chris Edmonds told Radio Australia’s Pacific Beat program that the drop from 7 per cent in 2015 to 4.3 per cent was huge adding it projected that the growth would slow even further to 2.7 per cent in 2017.

BPNG Governor Loi Bakani said the growth was lower than the levels in 2014 adding that for 2016, this would be driven by activity in the non-mineral sectors, resumption of production at the Ok Tedi mine, increased production at the Ramu nickel/cobalt mine and increase in activity in some parts of rural PNG as a result of infrastructure development.

He said the prevailing low international commodity prices, low export receipts and downward pressure on the kina exchange rate was expected to continue in 2016 and that government had provisioned for external financing to fund its infrastructure programs as well as to refinance domestic debt.

On the same token the governor said that the non-mineral sectors had the potential for inclusive growth and it was critical that government pursed them. Among them the small to medium enterprise initiatives, the agriculture reforms, structural reforms and introduce appropriate trade and investment policies to help boost growth in the non-minerals sector.

In addition to this the bank had stated that appropriate concessions were essential to attract more foreign direct investments into non-mineral sector.

"All these will help reduce the economy’s dependence on the mineral sector.

"These initiatives must be supported by further improvements to key infrastructure and reforms to pubic utility services to enhance reliability and efficiency. Post Courier/ One PNG

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