BSP expecting growth this year


THE Bank South Pacific is expecting a much improved year, backed by key projects expected to proceed in the near future, says group chief executive officer Robin Fleming.
This is despite 2020 being a difficult year for individuals and businesses, he said.
Fleming highlighted in last December’s quarter of the BSP economic and market insight that dealing with the implications of the Covid-19 pandemic was both a major challenge and significant achievement for the bank in responding positively to a difficult year.
“Global economic output is expected to expand by 4 per cent this year but remain more than 5 per cent below pre-pandemic projections, while PNG economic growth is projected to recover to 2.5 per cent,” he said.
Fleming said global economic growth was expected to expand by 4 per cent in 2021, after shrinking by a negative 4.3 per cent in 2020.
Global growth is expected to moderate in 2022 to 3.8 per cent, weighed down by lasting damage from the Covid-19.
Fleming said advanced economies were projected to recover, with growth reaching 3.3 per cent and 3.5 per cent in 2021 and 2022 respectively.
This is on the back of pandemic containment, aided by widespread vaccination and sustained monetary policy accommodation, which is expected to more than offset the partial unwinding of fiscal support.
The Pacific region is expected to recover by 1.3 per cent in 2021, contingent on how quickly travel and trade restrictions are resolved, according to the Asian Development Bank’s December report.
PNG’s economic growth in 2021 is expected to recover to 2.5 per cent, compared to a 0.4 per cent increase in 2020. Fleming said PNG’s growth depended on the major projects proceeding in the near future.
“Major projects such as the Wafi-Golpu valued at K18.4 billion have received environment permit and the Papua LNG fiscal stability agreement has been signed by all parties,” he said.
“This also includes the planned resumption of the Porgera mine in the near future which will provide immediate foreign exchange relief.”