Bakani cautions govt to maintain expenditure targets

BANK of PNG Governor Loi Bakani has cautioned the Government to maintain expenditure targets to avoid any over-spending which will increase the debt level.
Bakani urged the Government to improve revenue raising measures and compliance.
This was highlighted in the bank’s March-June 2020 quarterly economic bulletin released yesterday.
“In December 2020, the Government passed the 2021 National Budget with a deficit of K6,612.8 million, relatively similar to the 2020 Supplementary Budget, and is 7.3 per cent of the gross domestic product,” he said.
“Revenue is projected at K12.9 billion, while expenditure is at K19.6 billion.” Bakani warned the Government to maintain expenditure targets to avoid any slippages that would increase the debt level and to improve revenue raising measures and compliance.
He said funds raised from domestic and external sources for Covid-19-related expenses and the SME sector should be properly accounted for, audited and reported to ensure transparency and accountability on their use.
He urged the Government to clear arrears or commitments for services rendered by the private sector which would assist those businesses to maintain their workforce, and contribute to the economic recovery.
Meanwhile, economic indicators available to BPNG indicated that domestic economic activity declined significantly in the second quarter of last year.
Bakani said this was largely due to the introduction of the nationwide state of emergency last April as part of the containment measures to address the Covid-19 pandemic.
“The decline in international commodity prices and exports, lower imports as well as a fall in annual private sector employment are all indicative of the slump in economic activity,” he said.