NRI releases strategy to boost demand during SOE

THE PAPUA New Guinea National Research Institute (PNG NRI) released Spotlight Volume 13, Issue 10 yesterday as a potential strategy to boost aggregate demand for goods and services in the country during the Covid-19-enforced state of emergency.
The report stressed that the Government needed to implement the economic stimulus package in an effective and efficient manner to boost demand for goods and services.
PNG NRI deputy director Associate Prof Eugene Ezebilo, who is the author of “Potential strategy to boost aggregate demand for goods and services in Papua New Guinea during the Covid-19 Pandemic”, said the report was one of the main intervention strategies to mitigate the impact of the coronavirus lockdown on the national economy.
The lockdown measures that were implemented by the Government to prevent the spread of the Covid-19 restricted the movement of people, supply of goods and services and total quantity of goods and services bought (aggregate demand).
“It is necessary to boost aggregate demand to reduce the risk of the economy slipping into recession,” Ezebilo said.
The Government declared a K5.7 billion economic stimulus package with the Internal Revenue Commission (IRC) providing opportunity for business owners to pay corporate and personal income tax in instilments until June 30.
However, Ezebilo said for the stimulus package to boost aggregate demand it had to be implemented in an effective and efficient manner and monitored and evaluated to ensure that funds were used for what their intended purpose.
He said although the payment of tax in instalments was a good development the window of this opportunity is too short and IRC needed to consider continuing the arrangement until such a time that a solution was found to the Covid-19 pandemic.
Ezebilo stated that the government needed to consider implementing other intervention measures to boost aggregate demand such as the bailout of firms in the sectors that had been hit hardest.