Pandemic contributing to revised GDP growth of 1pc: Report

THE current Coronavirus (Covid-19) Delta wave is among issues contributing to the revised gross domestic product (GDP) growth of one per cent for this year, well below the earlier forecast of 2.5 per cent despite soft commodities benefiting from favourable price shifts.
This was according to BSP Financial Group Ltd’s (BSP) Pacific Economic and Market Insights for the third quarter of this year.
The report also stated that while the surge in the number of Covid-19 cases continued to pose a threat to the economy, businesses and the economy could not afford nationwide lockdowns.
BSP group general manager for corporate banking Peter Beswick said the focus needed to remain on appropriate containment measures and safeguards of masks, social distancing, restrictions on gatherings, and most critically with high levels of vaccination coverage to slow the pandemic, which would, in turn, reduce the loss of life and stress on health systems and drive the country’s medium term economic recovery.
“Major projects will provide PNG businesses certainty and growth prospects in the economy will remain challenged until resource projects like the Papua LNG finalise fiscal terms and conditions for the project and detailing the framework to complete upcoming negotiations,” he said.
“Barrick Gold chief executive officer remains committed to restarting the Porgera mine in 2022, while Total has announced the re-mobilisation of the project teams with the objective to launch in early works in late 2022.
“This positive development follows the Government’s reconfirmation of the Papua LNG gas agreement 2019, the signature of the fiscal stability agreement and the licence extension.”
Newcrest also recently announced Lihir would be carrying out a pre-feasibility study to accelerate the mine to be a one million ounce plus per annum producer from 2024.
Beswick said this was another important progression for the economy as “the US$180 million (about K617.3 million) project delivers increased ore reserves, brings forward gold production and improves operational flexibility by establishing an additional independent ore source”. In the South Pacific, the economy is projected to contract by 0.6 per cent this year, a reflection of severe constraints of the Covid-19 containment measures, particularly border restrictions which continue to have on business activity and tourism in, Samoa, Tonga, Vanuatu and the Cook Islands.
Fiji is seeing the positive impact of reopening its borders to tourists next month following its aggressive vaccination programme.
Despite impact of the Covid in economies over the past two years, the sub-region’s economy is expected to rebound by 4.8 per cent next year as countries reopen borders.