Some exports bring good news

By SHIRLEY MAULUDU
BANK of PNG Governor Loi Bakani says prices for some of Papua New Guinea’s export commodities continued to improve up to last November.
He made the statement in BPNG’s Quarterly Economic Bulletin for September 2017 which was released yesterday.
Bakani said prices for crude oil, nickel, cocoa and copper increased by 12.4 per cent, 6.7 per cent, 6.5 per cent and 3.8 per cent respectively.
Prices for liquefied natural gas (LNG), coffee, gold and tea declined by 3.9 per cent, 3.7 per cent, 2.4 per cent and 0.9 per cent respectively.
Bakani said there was an increase in foreign exchange inflows from export proceeds.
He said the National Government’s 2018 Budget had a planned expenditure of K14.717 billion and a revenue of K12.7 billion, giving a fiscal deficit of K1.9 billion or 2.48 per cent of gross domestic product (GDP).
“The deficit will be financed from both external and domestic sources of K1.613 billion and K373.8 million respectively,” Bakani said.
“The domestic financing component of the deficit will be from the issuance of Government treasury bills and Government bonds.
“External financing will be sought from several international organisations including the World Bank, Asian Development Bank and concessional loans from other development partners.
“The Government’s financing strategy to relieve the domestic market of funding pressures by introducing a financing mix, away from the domestic market towards external financing, is commendable.
“These would also provide the much-needed foreign currency to support the domestic foreign exchange market.”
Bakani said following approval of the 2018 Budget by Parliament, he reiterated that all efforts should be focused on ensuring the external funding of the budget be realised early this year.
“This mainly includes the concessional project funding from the Asian Development Bank and the World Bank under the International Development Assistance (IDA)18,” he said.
Bakani said PNG should not repeat the past experiences whereby concessional funding from the World Bank under IDA17 was not fully utilised.
Bakani also stressed that work should start early in 2018 to realise the draw-down of the remaining balance of the Credit
Suisse Syndicate loan and the issuance of the Sovereign Bond as budgeted.