K300mil to back budget deficit


THE Government will restructure its debt using the US$100 million (K300m) from the World Bank in its 2018 Budget support, says acting Prime Minister and Treasurer Charles Abel.
Abel and other Cabinet ministers met bank officials yesterday in Port Moresby to launch the economic update report.
He said the World Bank was partnering the government on some programmes.
“It will help to finance the deficit and will take the dependency away from short-term money markets so the government can restructure the debts into longer term concessional debts,” he said.
“This is part of the strategy of the budget to get the interest costs down.
“Payroll and interests are the biggest costs in the government budget – and it’s escalating.
“We are engaging with the World Bank directly through agriculture and other sectors, and indirectly through budget support.”
He said the International Monetary Fund and the World Bank were looking at some of the bigger macro-economic structural reforms.
“We have foreign exchange issues yet we have huge current account surplus. This means what we are exporting is worth much more than what we are importing,” he said.
“We are working on some of the longer-terms issues, that is, moving into agriculture and replacing the imports that we rely so heavily on –food and fuel.”