Bank predicts big impact

THE Asian Development Bank expects the Covid-19 to have a wide impact on PNG this year, with the manufacturing industry struggling because of the disruption to supply chains.
In its Outlook 2020 report, ADB said transportation, accommodation, and food services would be hit by restricted international travel by air and sea.
Wholesale and retail trade will also be hampered if imports of goods were delayed.
The public sector may also be affected if weaker commodity prices reduce revenue and force budget cuts.
It said Government capital expenditure was budgeted to grow by 18.8 per cent this year, which could provide some stimulus, especially for construction.
But such expenditure may prove difficult as the 2020 budget depended on securing significant external financing, not all of which is yet certain.
In addition, in the first quarter of this year, infrastructure projects built by contractors from China were slowed or suspended.
It said agriculture was to expand this year with new palm oil plantations starting to bear fruits, and new cocoa plantations also beginning to produce.
But the Covid-19 could dent production as overseas demand weakens, the report said.
Meanwhile, it said the Government had increased its production tax on log exports from 30 per cent to 50 per cent, which was expected to push log production lower.
In any case, demand for logs would be another victim of Covid-19, with some ports in China experiencing inventory buildup and unable to take delivery.
Inflation was forecast to maintain its downward trend in the short term as the economy outside of extractive industries remains weak.
It predicts that communication costs, which had a weighting of 4.5 per cent in the consumer price index, may fall further with installation of a new fiber optic cable to bring faster and cheaper internet.