Economy on rebound: Abel

THE national economy is on the rebound with revenue collections “slightly ahead of budget”, according to Deputy Prime Minister and Treasurer Charles Abel.
“After some challenging years, we are beginning to see a rebound in the national economy,” he said.
“The kina had experienced a downward pressure since 2014 after the end of the construction phase of the PNG LNG Project, and the collapse of the (global) oil price. And that is to be expected in times of economic slowdown, especially in a country that relies heavily on commodity exports.”
He said the “overhang in demand for foreign exchange has been reducing over time but is certainly not eliminated yet”.
Abel welcomed a recent ANZ Bank report FX Insight which he said confirmed the medium-term outlook for the kina was positive.
He said the kina had been stable for some time at around $US0.30/kina and $A0.4/kina.
“The ANZ report forecast that the kina will strengthen against the (US dollar) reaching 0.38 from the current 0.30 by 2020. This is in line with the Government’s own forecasts which suggest that the kina will strengthen in the medium term.”
Abel made the comments after he said an Opposition MP had “misrepresented the report”, and the “dramatic and misleading media reports in the Post-Courier (newspaper)”.
The ANZ report had noted that the “increased foreign currency supply over recent weeks has seen outstanding orders (excluding profit repatriation orders yet to be placed) fall to K1.5 billion ($US500mil) from a peak of K3 billion ($US1bil) in September 2017.
“This is a welcome development for the market,” Abel said.
“This year in accordance with the 2018 Budget, the Government has successfully negotiated direct, highly concessional budget support from the Asian Development Bank and the World Bank, in recognition of significant reforms underway including a Medium-Term Revenue Strategy, as well as completed its programme with Credit Suisse.
“These sources will result in nearly $US420 million (K1.26bil) foreign exchange in 2018.”