Economy seeing mixed signals amid Covid-19: Treasurer

TREASURER Ian Ling-Stuckey says the country’s economy, in the middle of the Coronavirus (Covid-19) pandemic, has seen “mixed signals”.
Ling-Stuckey said the Government’s “steady and responsible budget repair and reconstruction” was protecting the budget and the economy.
“We expected (that) the deficit would be K2.7 billion worse due to the Covid-19, rising from K4.6 billion to K7.3 billion,” he said.
Ling-Stuckey said the final budget outcome indicated that a massive drop in domestic revenue did occur, “although it was slightly less than expected”.
“There are positive signs that our economy is starting to turn the corner after the worst economic shock to the global economy in a century,” Ling-Stuckey said.
“I am pleased that real growth in the non-resource sector, which accounts for 75 per cent of our economy, is expected to lift from 3.3 per cent to 3.4 per cent this year. The agriculture sector is expected to grow by 4 per cent – an increase of 0.6 per cent.”
He said the Kina value of the economy grew from K81.6 billion last year to K91.5 billion this year.
“This is a pleasing increase of 12 per cent, up from the 10 per cent estimate at budget time,” he said.
“The Government, in 2019, began the process of budget repair after being left with a massive budget deficit, debt levels that had increased by over 300 per cent, debt interest cost levels that had increased by over 400 per cent.”
Ling-Stuckey said last year’s deficit increased as expected by K2.7 billion due to the Covid-19, although the composition was slightly different with K2.5 billion being due to a drop in revenue and K0.2 billion (K200 million) from increased capital spending on projects funded by international partners.