Bank expecting growth despite slowdown

ECONOMIC activity in the country slowed down over the past six months, according to a bank report.
Bank South Pacific general manager, Treasury, Rohan George said despite the short-term slowdown, the medium and long-term prospects looked positive in light of the major LNG and mining development projects in the pipeline.
The bank expects a Gross Domestic Product growth of around 1 per cent in 2018, in light of the impact of the February 26 earthquake.
George also said there had been some improvements in the country’s foreign exchange market.
“June 2018 foreign exchange turnover was K3.6 billion, the largest monthly turnover for five years recorded,” he said.
“Outstanding forex orders have fallen 50 per cent from February’s peak, easing Papua New Guinea’s foreign exchange liquidity bottleneck which will help improve business sentiment during the second half of 2018,” he said.
The report said apart from the Central Bank intervention, “short-term solutions for the FX shortage will likely come from increased levels of foreign direct investment associated with new or extended energy or mineral projects”.
“This may materialise in an influx of foreign currency into the market in the next six to 12 months.”
The report commented on the preliminary estimates of the fiscal operations of the Government over the three months to March 2018, and noted that the Government’s total revenue, including foreign grants, was K2.4 billion.
Total expenditure was K2.7 billion over the three months of 2018.