The consumer price index rating is now 6.9%, closing the first quarter of this year, with this the highest level since 2010.
To counter this high domestic inflation, the Bank of PNG has tightened its monetary policy by increasing the kina facility rate by 0.25% to 3.25% this month.
Corporate banking GM Peter Beswick - in the BSP Pacific Economic and Market Insight Report for the second quarter of 2022 - said this would result in the finance sector reviewing loan and deposit interest rates.
"The Bank of PNG has said that monetary policy needed to be tightened, with the 3.25% rise in July. This move is to counter high domestic inflation. BPNG has noted the key drivers of inflation as being import inflation (through fuel and food), caused by the pandemic and Russia-Ukraine conflict.
"Inflation and living costs are expected to remain high for the remainder of 2022, as global recession fears affecting fuel, energy and logistic costs globally."
Beswick said PNG should therefore benefit from increased prices on commodity exports.
But he said the lift could be partiality offset by reduced export volumes in the agricultural sector, as smallholders and regional communities are involved in the general election.