Economic growth a reason for backlog

Business

THE PNG economy has grown significantly in recent years and this is one factor contributing to the current backlog of foreign currency orders, according to Westpac’s managing director Adrian Hughes.
Hughes told The National that narrow avenues of investment into PNG and its reliance on imports were also contributing factors.
“The issue in the foreign exchange market is structural,” he said.
“Outside of the natural resource sector, foreign investment channels into PNG are quite narrow while at the same time we are still very import-dependent.
“Prior to the wave of foreign investment that accompanied the construction phase of PNG LNG, the levels of foreign currency coming in were largely sufficient to meet import demand.
“The difference between now and then, and what has led to the backlog of foreign exchange orders, is the economy has grown significantly over the past six years.”
He welcomed the Government’s 100-day plan and the planned intervention of up to US$100 million (K320 million) into the local market which would provide some relief to the business community in the lead up to Christmas.
Hughes noted the increased level of consultation between the Government and stakeholders as being very positive.
“It is very encouraging to see the increased level of engagement recently between policy-makers and development partners,” he said.
“The business and banking sectors certainly welcome further dialogue as we all work through this difficult period.
“There are challenges that have to be addressed and the 100-day plan points us in the right direction.

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