Outlook not so earth-shattering despite earthquake shock

THE 2018 mid-year economic fiscal outlook projects that the Gross Domestic Product will decline to 1 per cent from 2.4 per cent, says Treasurer Charles Abel.
He said the report was more positive than the projections made following the earthquake in February.
“The resumption of the production in major mines affected by the earthquake is particularly promising, given higher average output levels than before the earthquake,” he said.
“Oil and gas prices have remained elevated which is also positive, although gold and base metal prices have come off mid-year levels.
“While the global economic environment has improved, growth in the domestic market has remained slow in 2018 after the February earthquake, and the economy has been constrained by effects of foreign exchange imbalance although this has been significantly reduced.”
He said the mid-year fiscal results showed revenue collections to be at 44 per cent of budget, and expenditure at 40 per cent.
Abel said public debt was at K24.4 billion – 29.8 per cent of the GDP.
“Prices for oil and gas, gold and copper and cocoa were running above the 2018 projects.
“Production on the PNG LNG project was 30 per cent ahead of nameplate with two thirds of lost production expected to be made up by year end.
“Total net borrowing in the first half of 2018 amounted to K812.9m with external financing accounting for K631m (largely proceeds from the credit Suisse final tranche) and domestic financing accounting for K181.9m,” Abel said.