Economy doing well, says Polye

 THE country’s economy is performing well and will improve further in the 2013 fiscal year, according to an update by Treasurer Don Polye.

He told Parliament last week that the inflation forecast was also better while the kina had a strong appreciation.

He said based on the latest figures, it appeared that economic growth in nominal terms in 2012 was 7.9%, down from the 9.2% estimated in the 2013 budget.

He said the estimate for economic growth in 2013 had been increased from 4% to 5.9%.

“This reflects advice provided late in 2012 that the PNG LNG construction would not slow in 2013 as had been expected at the time of preparing the 2013 budget,” he said.

The treasurer said there was also a preliminary revision of the inflation forecast. 

He said the inflation outcome in 2012 was better than expected with an outcome estimate at 2.2% in annual terms or 1.6% in through-the-year terms.

“This very low figure reflects the impacts of the strong appreciation of the kina which appears to have had a significant lag in feeding though to prices. 

“I’m pleased that after encoura­ging businesses to ensure that the kina appreciation is passed onto customers through lower prices, it is finally starting to occur,” Polye added. 

“The 2012 inflation outcome also reflects the government’s tuition free fee education policy, which lowered cost for most household across the country.”