Global economy remains under pressure: Bank

THE global economy remains constrained by inflated commodity prices, lingering pandemic effects, and supply bottlenecks, according to a bank.
According to the BSP Pacific Economic and Market Insight Q1 2022 Report, BSP Group general manager for corporate banking Peter Beswick said Russia’s invasion of Ukraine was significantly affecting global commodities.
“One of the major impacts has been crude oil, with prices having increased from US$35 (about K123) to US$120 ( K422) BBL in the last 18 months (240 per cent).
“A recent media report by Puma Energy chief executive officer Hulala Tokome, confirmed that fuel prices will increase by 80 tea per litre and will continue to rise.
The impact will be felt across the economy with consumers, vehicles owners, construction companies, businesses, and electricity suppliers bearing the brunt of the higher fuel costs,” Beswick said.
In relation to the Coronavirus, Beswick said although its impacts had dissipated this year, persistent supply chain issues especially from China were causing significant delays in product shipments and the rise in shipping costs increased to over 300 per cent.
“This is a significant impact for PNG as 85 per cent of consumables, raw materials for production, and finished goods are imported,” Beswick added.
For many businesses, the increased costs will need to be recouped from consumers via higher prices.