BSP projects challenges in outlook

THE global outlook and delays to the start of major domestic resource projects present a challenging period for the Government to navigate, BSP group chief executive Robin Fleming says.
Fleming made the statement when releasing the BSP Economic and Market Insight December quarter publication last week.
He said the potential impact of uneven global economic growth on PNG economy with the following points supported BSP’s views:

• Global growth is projected to increase slightly to 2.5 per cent in 2020, up from 2.4 per cent in 2019 (the lowest rate of expansion since the global financial crisis);
• East Asia and Pacific region’s growth is projected to ease to 5.7 per cent in 2020 amid continued domestic
  and external headwinds, including the impact of trade tensions;
• PNG’s economy is forecast to moderate in 2020 to 2.8 per cent , after its 2019 growth recovery of around 5.0 per cent when output in the extractive sector returned to pre-earthquake levels.

The softer 2020 growth outlook is driven by slower growth in the extractives sector with some counter balancing growth from the non-extractives sector; and,

• Delays to key domestic resource projects are likely to negatively impact PNG’s growth over the short-term, with P’nyang negotiations called off and Wafi-Golpu
  negotiations yet to recommence.

On Papua New Guinea’s 2020 Budget, Fleming said BSP “commends the Government for undertaking the challenging exercise of restating and reforecasting the Budget number and intend to support it where possible”.
“For example, BSP will support its endeavours to grow the agriculture sector and SMEs,” he said.
BSP group general manager corporate banking, Peter Beswick noted that prevailing customer sentiment had softened over the last 12 months.