Economic future ‘uncertain’

By DALE LUMA and SHIRLEY MAULUDU
MEMBERS of Papua New Guinea’s private sector have expressed mixed views regarding the country’s economic outlook.
According to Kina Asset Management Ltd, the outlook for the markets remains uncertain.
Board chairman Sir Rabbie Namaliu highlighted this in the company’s recently released 2021 annual report.
“In my last report to shareholders, I noted that the company was cautiously optimistic about the future,” he said. “In the US and parts of Europe, accommodative monetary and fiscal policies, high Covid-19 (Coronavirus) vaccination rates, and the relaxation of restrictions on economic activity have all combined to facilitate a strong economic recovery.
“In Australia, federal and state governments, who had (then) been successful in controlling the spread of the virus, were more cautious than their counterparts in the US and Europe in easing restrictions.
“In other parts of the world, notably India and some other developing countries, the pandemic had only just begun to seriously affect the population.
“At the time of writing, the outlook for markets is again uncertain.
“As many countries are removing restrictions on economic activity, outbreaks of the Omicron variant of the Covid-19 have added to supply chain disruptions, which have in turn added to rises in the prices of a wide range of commodities and goods.
“Inflation outcomes have been much higher, more persistent, and more broadly based, and central banks globally have begun to review monetary policy settings.
The conflict in Eastern Europe – in addition to the terrible human cost – has added to this uncertainty.”
Sharing similar views was Port Moresby Chamber of Commerce and Industry (POMCCI) president Rio Fiocco, who said there was no upside to the current business climate.
Fiocco said it was expected to remain the same for the next two years as businesses waited for a final investment decision (FID) on the Papua LNG (liquefied natural gas) to move into its construction phase.
“It is likely to remain the same as it is now for at least the next 12 to 18 months,” he said. “Businesses don’t see any real upside until the final investment decision is made on the Papua LNG project and start construction phase which is likely to be around 2024.”
Fiocco added that in relation to developments in Port Moresby, any new projects were important as it created new employment opportunities in the construction phase and later on as well.
Nambawan Super chairman Reginald Monagi said there was an indication that the country’s economy was ready to recover after challenges brought on by the Covid-19.