More inflation on PNG's horizon

PAPUA NEW Guinea should brace itself for a continuing rise in the rate of inflation for the rest of 2022.
More inflation on PNG's horizon More inflation on PNG's horizon More inflation on PNG's horizon More inflation on PNG's horizon More inflation on PNG's horizon

Greg Pawson

Staff Reporter

This is the word from Kina Bank chief executive Greg Pawson, who was responding to questions from The National newspaper.
 
Pawson said supply chain disruptions would also add to high levels of imported inflation and that government's deficit financing from external sources would inject money into the economy, beefing up aggregate demand for goods and services.
 
This, Pawson said, would further add inflationary pressure.
 
"We anticipate further increases in inflation for the rest of this year, as the Russia-Ukarine war continues, along with reduced oil output by OPEC member countries.
 
Supply chain bottlenecks would add to high levels of imported inflation, he added.
 
"The Bank of PNG's adjusted GDP outlook goes from 2% to 4%, despite underlying headwinds of global economic recession.
 
"BPNG noted total foreign exchange market turnover eased in the September quarter. But it remained strong compared to the corresponding period in 2021."
 
He said the Department of Treasury's mid-year economic and fiscal outlook for estimates the total nominal value of the economy grew from K82.64 billion in 2020 to K92.56 billion in 2021, and to K110.30 billion in 2022.
 
"A gain in nominal GDP of K27.7 billion in just two years, which is by far the largest increase in the value of the economy in PNG's history. The previous largest two-year increase was K12.8 billion in 2013 and 2014 was due to the start of the PNG LNG production."
 
Pawson said a key driver of much needed economic stimulus will be the start of the flagged mining projects across PNG which for many provincial areas will deliver growth.
 
"In addition, business activity will further support growth as business houses have returned to full operation, after the disruptions caused by the pandemic," he said.

 

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