Report highlights rebound

BANK South Pacific says the Gross Domestic Product forecast for the country this year factors in much lower energy prices.
But a rebound is expected next year as the economy emerges in a recovery phase
The bank highlighted this in its first quarter Pacific Economic and Market Insights publication yesterday.
The report focuses on the forecast impacts on economic growth in the region in the immediate aftermath of the global Covid-19 pandemic.
With the major economies of China and the United States decelerating rapidly as movement and travel restrictions required businesses to scale back output, energy prices and other commodities reduced significantly as demand contracted.
Equity markets and share prices reflect these negative sentiments.
“BSP appreciates the impact, the changed economic conditions is having on its customers and is working proactively with its business customers to assist them during the Covid-19-related difficulties via support packages launched in the third week of March.”
BSP group chief executive Robin Fleming said since announcing the Covid-19 relief packages for businesses in the countries BSP operated in, it had reduced the interest rate in PNG on all its existing variable rate interest products by 1 per cent effective April 1, fixed rate products by 1 per cent for new loans funded after beginning of last month.
The only lending product that did not change was BSP’s first-home ownership scheme loan which was started in 2015 with the fixed loan rate of 4 per cent.
Group general manager corporate banking Peter Beswick said: “With BSP’s experienced relationship managers in PNG and branches across the Pacific, we are ready to assist and support business activity.
“And our national branch networks remain open for business.”
Beswick said once the effects of the Covid-19 passed, “business sentiments are anticipated to be cautious, as commodity prices recover, global trade reactivates and international travel resumes”.
“PNG’s existing resources operations such as Ok Tedi, Harmony Hidden Valley, Newcrest Lihir, and Exxon PNG LNG will continue to create opportunities while in the medium-term, there are positive economic growth prospects underpinned by the resources sector projects, including Papua LNG, P’nyang, and Wafi-Golpu,” he said.