Revenue low: Official

By SHIRLEY MAULUDU
MOST of the commodity prices are trending well below the budget estimate, according to the Department of Treasury.
Macroeconomic policy division first-assistant secretary Andrew Oaeke said in Port Moresby yesterday “for the macroeconomic update, we have projected Papua New Guinea economy to grow at around 2.2 per cent in GDP against the 4.3 per cent we have projected in the 2016 budget”.
“Major contributing factor has been the world commodity prices that have very much affected our revenue,” he said.
“We have experienced strong growth over the past decade. But now, as we head into 2016, after the drop in commodity prices, we have now returned to a normal trend of growth at around 2.2 per cent. Other commodity exporting countries have been severely affected.”
He said oil prices had significantly affected revenue.
“Our particular interest is in oil prices. That has the greatest sensitivity in terms of Government revenue ration,” he said.
“Since January this year, we have seen the price come down to US$25 (K78) per barrel. In the 2016 budget, our assumption was $US54 (K167.47) per barrel.
“The price has now recovered to $US45 (K140.39) per barrel. But for us to hit our assumption, the price had to go up to about $US80 (K249.58) per barrel. It may take a bit of time. So that was why we had to make adjustments to our budget.