by Delly Bagu – EM TV, Port Moresby
The PNG Government’s revenue is expected to slow down over the next three years.
Contributing factors include slowing domestic business activity and falling output from existing mining and oil operations. But according to the Asian Development Bank’s latest economic report, the slowdown is a chance to boost expenditure quality.
At the ADB forum yesterday, ADB Country Economist, Aaron Batten reiterated that while PNG’s economic growth will reach record heights in 2015, revenue growth will slow down in coming years.
To reduce the budget deficit and achieve fiscal balance by 2017, the government plans to cut total expenditure.
The economist said achieving these targets will be challenging, but returning the budget to normalcy is vital for restoring safeguards against global economic shocks.
The revenue reduction is due to declining global commodity prices, slowing domestic business and falling output from existing mining and oil operations as the LNG Construction phase comes to an end. Batten further said that the revenue slowdown presents an opportunity for the government to refocus efforts on improving the quality and impact of public expenditure.
Mr Batten said less revenue inflows will enhance the government’s ability to ensure its funds are better managed.