Economy shrinking, says Aitsi

THE economy is experiencing stagnant job numbers, a decline in foreign investment and shrinking levels of activities in most sectors, a company executive officer says.
Credit Corporation chief executive officer Peter Aitsi told The National it was a worrying trend.
“Recent economic forecasts put out by the Asian Development Bank and ANZ indicated that the PNG economy will experience a recession in 2020 and record a contraction of Gross Domestic Product of up to 2.6 per cent,” Aisti said.
“Unfortunately, the closure of the Porgera mine and the delay in a number of our major resource projects will exacerbate the economic impact of the Covid-19 and most likely lengthen the recovery time.
“Currently, many of our people are drawing on our wantok system to help them get through this crisis.
However, this cannot (continue forever). The wantok system will come under tremendous pressure as salary earners lose their jobs and/or use up their superannuation savings.”
He agreed with the Business Council of Papua New Guinea that 68 per cent of businesses will shut down by the end of the year because of the lockdown. Port Moresby is now into its second 14-day lockdown since March.
“I share the concerns that many businesses are now really struggling due to the uncertainties generated by the effects of the Covid-19,” Aitsi said.
The Government this week imposed further restrictions on the movement of people in Port Moresby and allowed only essential businesses to operate.
“Businesses are impacted because customers are not able to freely move around and transact their normal business,” Aitsi said.
He urged the Government to provide some form of support for businesses “so they can continue to operate, pay their contractors, maintain suppliers, meet their taxes and importantly keep people employed”.