Economy in recession

The National Main Stories

By HELEN TARAWA
THE Covid-19 pandemic is taking its toll on the economy which is continuing to contract six weeks into the lockdown, with further negative growth predicted, Treasurer Ian Ling-Stuckey says.
He said according to a commissioned research into the impact of the lockdown, the Gross Domestic Product forecast at 2 per cent in the 2020 national budget would drop to minus 1.5 per cent (-1.5 pc).
The research further revealed that the possible economic impact after a two-month shutdown would see the Gross Domestic Product growth rate drop to minus 3.8 per cent (-3.8 pc), and a further drop to minus 6.2 per cent (-6.2 pc) after a three-month shutdown.
“The economic research results are very worrying,” he said.
“This is not intended to scare or talk down the economy in any way, but to highlight the challenges.
“Poverty is a risk factor in dying early.
“A major drop in GDP will lead to more poverty and more premature deaths.”
A recession occurs when there are two or more consecutive periods of negative economic growth, meaning GDP growth contracts during a recession.
The lockdown began after the state of emergency was declared on March 22.
Ling-Stuckey said the numbers were “distressing, particularly when four out of every 10 people in PNG already lived in poverty, according to international measures”.
He said Covid-19 was deadly and there was uncertainty about the death rate.
“PNG is fortunate in not having a single death yet from this silent killer,” he said.
He said the Government was trying to “strike the right balance between protecting our health and protecting our livelihoods”.
“If we drop all lockdowns, and go back to business as usual, tens of thousands of people in PNG will likely die due to Covid-19,” Ling-Stuckey said.
“However, if we keep very tight lockdowns in place, then the increase in poverty will also likely rise which mean tens of thousands of people in Papua New Guinean will die due to loss of livelihoods.”
Meanwhile Ling-Stuckey said he would announce this week Government’s support.
“We will not be able to meet all expectations.
“We are working and praying to get the health and livelihoods balances correct,” he said.

9 comments

  • My good Government , please do something with the wages & Salaries taxes ( cease or reduce personal income tax) at this time of the COVID ’19 lock down. The little that we are earning during this pandemic of COVID 19′ should be critically budgeted for our Health and Diet during this lock down however we can’t. Our hours of work is lesser than usual, however our taxes are fixed when it comes to deduction and on the other hand GST is terribly reaping us even more.

  • Also Government employees are not paying the rentals. This a concern for landlords who depend on this income to upkeep the family. Kids are stranded without money in respective institutions.

  • Please decrease personal income tax to a reasonable rate where we may affort high demand of goods and services and also Students Tuition Fee

  • Please my good PM, the treasurer has just stated the effect of the lockdown on our economy. Kindly uplift the lockdown as soon as possible and restore normalcy. The virus haven’t killed anybody as stated in the media, we have 8 confirmed patient here in PNG and 7 are recovering as been stated in the media so why suffering our economy as stated clearly by the treasurer. Please restore back and we restore our economy.

  • I would like to re-iterate the African proverb – “Feed a man fish and tomorrow he will come back to you for for more fish. But show a man how to fish and he will fend for himself” So that is good that the PM is feeding our hungry people but this should be a short-term measure. The long to medium-term focus must be on giving our people their livelihoods so that they can be able to fend for themselves.

  • Clearly PM, the Corona Virus is not here to kill us but was already here with us as part of our life that`s why we simply can`t explain those PNG citizens in Goroka and ENB got tested positive! Yet we giving all PNG citizen`s working or not working hardship through the SOE and lockdowns for the sake of Greater Good.
    It seem all the stimulus package thing is just mouthwash and tax reliefs too so we just need normalcy in every aspects for us to survive. The people are suffering silently and not long with the police brutality and stealing of money and properties in the false pretence of SOE, lockdown and curfew from sorry mothers and dads trying to support and feed their children and family. The silence within will become loud then louder and loudest and we will have a bigger CRISIS than Covid-19.
    There are two things I’m scared of or don’t need to see;
    1. PNG citizens dying from starvation and
    2. Due to starvation and suffering leading to bloodshed.
    Well it is almost two months now and no deaths or serious patients from that virus then the other disease killing our men,women and children everyday.

  • We were already in recession before the the Marape and Steven government. At this time of COVID19, our government should consider reducing SWT, GST, PERSONAL INCOME TAX etc for the formal sector till after COVID19, compared to the informal sector there are no taxes paid.

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