The National, Tuesday October 29th, 2013
By FAYE MIKA
LIKE any developing country, Papua New Guina has been changing dramatically, Bank of Papua New Guinea assistant governor Joe Teria (pictured) says.
He said: “The liquefied natural gas (LNG) has been a revenue catalyst since 2010, but this transformation did not come alone, rather it came with challenges that the country and we, as individuals, have been trying to overcome to build a prosperous and harmonious society.”
Speaking at the economic policy analysis graduation at the National Research Institution last week, Teria outlined the macro-economic stability and growth in PNG.
“Between 2009 and 2012, the bank had successfully achieved its objective on monetary policy.
“Our country experienced a period of stable and consistent growth during which inflation averaged 6.4% a year.
“And I can state with confidence that our price stability objective will be achieved this year as well.”
The decisions that the bank made would affect ordinary Papua New Guineans and their interaction with the formal financial and economic sectors would then enable the bank to deliver sound policies.
“But we do not act in isolation,” Teria said.
“Monetary policy is conducted in a manner that does not hinder the Government’s growth targets, but instead meets our policy objectives”.
“This is relevant now as the PNG LNG construction is winding down and the Government has embarked on an expansionary budget with an unprecedented deficit of K2.7 billion.”
To achieve high economic growth this year and next year, the Government must concentrate on infrastructure development, massive investment in advance agriculture technology and continue its concentration of spending on health, education and, law and order, according to Teria.
Its domestic expenditure would result in an increase in salaries and purchases of goods.
Teria said profits of local companies would drive the demand but was likely to put pressure on domestic prices.
“There will also be some expenditure on imports,” Teria said, “but the government must try to refrain from excessive spending on imports as it would lead to a depreciation of the exchange rate and rise in inflation.”