Inflation reducing value of Kina, says institute

INFLATION has become a great concern in Papua New Guinea because it directly reduces the value of the Kina, according to the PNG National Research Institute (NRI).
The NRI Spotlight Volume 17, Issue 4, titled “Are the recent inflation figures for PNG reflecting the changes in prices of goods and services?” by Dr Thomas Wangi, highlights the recent increase in the prices of goods and services figures in the country.
“During high inflation, people buy less goods and services or need more Kina to buy the same amount of goods and services,” Wangi said.
“The loss in the value of Kina negatively impacts the cost of living, welfare of the people and cost of doing business.
“In 2020-2023, domestic inflation numbers were generally lower than expected. Some quarters such as September 2020, December 2022 and March 2023 officially recorded negative price changes, indicating falls in inflation.
“These inflation figures have been a concern because inflation pressure was high and people were struggling to afford high cost of living during those times.
“Inflation in PNG has been caused mainly by the coronavirus outbreak and war in Ukraine.
“To improve the reliability of the inflation figures, it is important for the NSO to review its data collection and recording procedure to address potential technical and human errors, review the sampling procedure to expand the sample size and conduct a new household income and expenditure survey to update the weights of the indicator items.”