Pruaitch: 2017 set to be gloomy

TREASURY Minister Patrick Pruaitch says 2017 will be a gloomy year with an expected increase of prices for goods and services.
Pruaitch said inflation was expected to be 6.6 per cent, higher than the budget estimate of 5.7 per cent for this year.
“The increase accounts for the higher than expected 2015 inflation outcome of 6 per cent, the gradual depreciation of the Kina against our major trading currencies and the anticipation of a gradual recovery in commodity prices.”
Pruaitch said export revenues had stagnated at around K20.8 billion in 2014 and last year even though 2015 was the first full year of LNG exports.
“We are anticipating significant export growth to commence in 2016,” he said.
“Additional export revenues are forecast to improve for copper, palm oil, coffee, cocoa and forest products.”
Pruaitch said some of the factors that influenced the downturn in economic activity this year were expected to ease.
“Foreign exchange imbalance continues to improve as Ok Tedi mine ramps up to full production,” he said.
“The additional foreign exchange proceeds from the Credit Suisse second tranche syndicated loan later this year, along with improved export revenues, should fully resolve the US dollar shortages that have also detracted from economic growth. The first tranche of US$200 million (K793 million) was received from Credit Suisse in August.”