IMF sees potential for real GDP to increase to 3.2% mark

REAL Gross Domestic Product is set to increase to 2.5 per cent this year from 2.2 per cent last year, according to the International Monetary Fund.
This projections were contained in the IMF staff report late last year.
The medium-term scenario in the IMF report forecasts that real GDP would then drop to 2.3 per cent in 2019 before gradually picking up to 2.9 per cent in 2020, then 3.2 per cent in 2021.
Another notable statistic in the publication was the projected increase of gross government debt from 35.4 per cent of GDP last year to 37 per cent this year.
“Slow growth, generous tax treatment of the LNG project, the drought and weak tax administration have all contributed to declining tax revenues and a substantial fiscal deficit and increasing debt-to-GDP ratio,” the IMF said.
“Inflation was boosted to over 6 per cent by drought effects, but is beginning to ease.
“Although PNG is running a large current account surplus, it is also experiencing large financial account outflows related to project debt repayments, resulting in a shortage of foreign exchange.
“Foreign exchange reserves have declined gradually to around US$ 1.7 billion (K5.45bil), covering five months of imports.
“Near-term risks to the outlook are tilted to the downside, reflecting the potential for fiscal deficit.”