Transport, accommodation, food prices badly affected: Treasurer

TREASURER Ian Ling-Stuckey says the negative impact of Covid-19 on the economy is bad.
He said transport and storage as well as the accommodation and food retail sectors were the worst hit.
He would be tabling a detailed and comprehensive report in this session of Parliament with further details in the Mid-Year Economic Fiscal Outlook (MYEFO), he said.
“The impacts of Covid-19 have reached into the resources and non-resources sectors,” Ling-Stuckey said.
“The non-resource sector where over 90 per cent of our businesses operate and over 90 per cent of our people are employed.”
The Treasurer urged MPs to use the 2020 budget as reference point to appreciate the negative impacts of Covid-19 on the economy.
“When we passed our budget, we had forecast nominal gross domestic product (GDP) not taking into account the inflation to grow up to K92 billion.
“The latest result from the MYEFO exercise that the GDP estimates have been revised to K81bil, a drop of about K11b and that’s quite massive.
“If we look a little bit deeper into the breakup of this particular K11bil drop, we will see that the oil and gas extraction sectors that we focus to grow to K15bil this year after MYEFO had dropped to about K11bil, a drop of about K4.5bil – nearly 28 per cent.”
Ling-Stuckey said the mining and quarrying sectors were forecast to grow up to K10.5bil this year but would now be dropped to K8bil – a drop of K2.5bil which was about 25 per cent.
He said the resources sector accounted for a little bit over half the drop in GDP.
“Comparing the effects of Covid-19 on the PNG economy to the rest of the world, we seem to be doing okay.
“The International Monetary Fund (IMF) global forecast for June this year, taking into account inflation, will drop to 4.9 per cent, down from their January forecast of 2.5 per cent.
“IMF June forecasts of – 4.9 per cent compared to PNG, for this year’s budget we had forecast real GDP to grow by 2 per cent.”