Abel still happy with economic outlook despite setbacks

THE country’s economic outlook remains positive despite export commodity market performing below expectations, says Treasurer Charles Abel.
He said private sector activities had also been hampered by the foreign exchange imbalance and restrictions on government domestic expenditure in recent years.
Abel told the PNG Petroleum and Energy Summit in Port Moresby that despite the setbacks, PNG was looking ahead with optimism.
He said total real growth this year was projected at 2.2 per cent.
“Growth will be driven by the non-mining sectors, feeding off the impetus from Apec-related spending across the non-mining sectors,” he said.
He also said continued improvement in the agriculture, fisheries and forestry sector reflected an expected good year for coffee and increased copra and copra oil production due to higher global copra demand.
Abel said in the medium term, the PNG economy was also conservatively expected to grow at an average rate of 2.4 per cent.
“However, the current projection does not take into account major pipeline projects such as the Papua LNG, P’ynang, Wafi-Golpu, Frieda Mine and Solwara 1, which once in the construction phase will provide a significant boost to the entire economy.
“The challenge I issue to the mining and petroleum sector is to advance your investment appraisal process and to develop these prospects expeditiously.”
Abel said for 2018, prices of key commodities were expected to increase modestly from last year.
“The oil price is projected at an average of US$51 per barrel in the 2018 Budget which is starting to appear conservative,” he said.
“The gold price is also expected to move slightly higher in 2018 due to ongoing safe haven demand resulting from geo-political concerns and potentially higher inflation rates.”