Q2 inflation falls to 6.7%; employment up 1.1%

Business, Normal

INFLATION slowed to 6.7% in the second quarter this year compared to 10.2% in the previous quarter.
Employment in the formal private during the period showed an increase of 1.1%.
In the overall job scenario during the 12-month period to June, employment rose at least 3.8%.
The average kina exchange rate continued its downward trend depreciating against most major currencies.
Because of this, the Bank of PNG (BPNG) maintained a tight monetary policy stance in the first half of this year to consolidate its effort in stabilising prices.
Headline inflation for the June quarter was 0.4% from 2.1% in the March quarter, according to consumer price index (CPI) in BPNG’s June quarter report.
The annual CPI headline inflation rate declined to 6.7% from 13.5% in September quarter last year.
Higher prices in the “rents, council charges and fuel/power”, ‘transport and communication’, “drinks, tobacco and betelnut”, “food”, and “miscellaneous expenditure” groups contributed to the increase.
Largest increases recorded were in “miscellaneous”, “drink, tobacco and betelnut” and “food” expenditure groups.
Although declines in inflation was favourable, BPNG said it was mindful of the upside risks to inflation that could come from a weaker kina, domestic demand, and increased Government spending, especially a fast drawdown of the trust account funds and domestic demand.
The bank, therefore, continued to maintain the monthly kina facility rate (KFR) at 8 this month.
BPNG’s employment index showed level of employment in the formal private sector increased by 1.1% in the second quarter.
Excluding the mineral sector, the level of employment increased by 1.2%.
By industry, it increased in the agriculture/forestry/fisheries, building and construction, wholesale, mineral and finance/businesses and others services sectors, which more than offset declines in the transportation, manufacturing and retail sectors.
By region, all regions recorded increases, except Southern and Islands regions.
Over the 12 months to June quarter the level of employment increased by 3.8%.
Excluding mineral sector, the level of employment increased by 3.9% over 12-months to June.