Economy set back by K10.7 billion

THE national economy has been set back by K10.7 billion, according to Treasurer Ian Ling-Stuckey.
He said the estimate was that more than 85 percent (K9.2 billion) of the contraction in the economy was due to the Covid-19 with less than K1.5 billion “non-Covid-related”.
He attributed the reduction in economic growth to:

•  Global impacts of the pandemic on oil and liquefied natural gas – an estimated drop in prices for 2020 accounting for K4.3 billion or 40 per cent of the decrease;
•  Combined impacts of the global and domestic Covid-19 impacts on the non-resource sectors of the economy;
•  Mining industry affected more than expected.
  He said these were global factors which PNG had no control over.
  In the non-resource sector, he said there was a decline in world trade for many of the country’s agriculture, fisheries and logging industry products. The tourism, accommodation and transport sector suffered from the closure of international borders around the world with an estimated K0.85 billion loss in revenue. He said overall, mining was expected to fall by K2.2 billion.
  He also highlighted that revenue was expected to fall by K2.7 billion in 2020.
  “The problem does not stop there because we must also increase expenditure to support health programmes and the economy in the face of the global pandemic. Covid-19 will add K645.3 millon to the government expenditure,” Ling-Stuckey said.