Law and order, inflation affect investor confidence

Investor confidence is affected by law and order, Foreign Exchange shortages and heightened inflation, according to Bank of South Pacific Financial Group Limited corporate banking general manager Peter Beswick.
“Investor sentiment is beginning to be impacted by law and order and inflation concerns, despite the positive resumption of Porgera’s operations,” he said.
“Adding to these concerns is the rising cost and irregularity of utilities which are essential for business operations.
“The reliance on back-up water and electricity has shifted up the baseline costs of many businesses,” Beswick added.
The nation’s primary fuel supplier ceasing supply in February and March exacerbated business costs and introduced new supply risks that materially impacted investment decisions.
Beswick added that the business community, especially in Port Moresby, were still awaiting the promised relief to businesses affected by the ‘Black Wednesday’ riots.
Beswick said the loss of business impacts employment, consumption and the flow of cash throughout the economy, which will have a longer term impact if these businesses choose to downsize or even cease operations.
“As businesses grapple with rising costs, many are forced to reassess their strategies and are reluctant to invest however, the country’s resource project pipeline remains positive with businesses focused on the potential upside in the medium term,” he said.
Furthermore, Port Moresby Chamber of Commerce and Industry Chairman Chey Scovell said the economic activity was constrained, there were a few businesses that were reporting that they were slightly above budget targets, but the majority of comments received by the various Chambers of commerce throughout PNG and the Manufacturers Council were that things were difficult.