Economic indicators show economic slow-down

 ECONOMIC indicators have shown a slow-down in the country’s economic activity in the September quarter of 2015, according to the Bank of PNG. 

Governor Loi Bakani said this was inclusive of:

• Decline in the total level of employment in the private sector;
• A lower growth in domestic credit by the banking system;
• Lower production and export values of most major export commodities. 

Bakani noted that data from the Bank’s Business Liaison Survey showed that the total nominal value of sales in the private sector increased by 6.2 per cent in the June quarter of 2015, compared to a decline of 8.1 per cent in the March quarter.

“Excluding the mineral sector, sales increased by 5.3 per cent, following a decline of 6.4 per cent in the previous quarter,” he said.

“By sector, sales increased in the wholesale, agriculture, forestry, fisheries, mineral, retail, manufacturing, finance-business and other services sectors, while it declined in the transportation and construction sectors.

“By region, the value of sales increased in the Southern, National Capital District, Islands and Momase while it declined in the Highlands and Morobe.

“Over the year to June 2015, the total value of sales declined by 5.1 per cent. 

“Excluding the mineral sector, sales declined by 7.5 per cent.” Bakani said the Employment Index showed a decline in the level of employment in the formal private sector by 3.4 per cent in the quarter.

“Excluding the mineral sector, the employment level decreased by 3.5 per cent,” he said. 

“There were declines in the construction, agriculture, forestry, fisheries, manufacturing, finance and business and other services sectors.”

Bakani said the annual headline inflation was 5.8 per cent in September 2015, which was mainly attributed to the depreciation of the kina.

He said the bank had continued to take a cautious approach by maintaining the policy signalling rate – the Kina Facility Rate – at 6.25 per cent throughout the quarter.

Bakani said the weighted average kina price of Papua New Guinea’s exports was 18 per cent lower in the September quarter of 2015.

“The lower export prices reflected weak international commodity prices and depressed global economy.”