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August 16, 2020
Finance News

Bakani Refutes Claims About Economic Crisis

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By Leanne Jorari – EM TV News, Port Moresby

Following his address to investors in Cairns earlier this month, Governor for the Central Bank, Loi Bakani, has refuted claims that the country’s economy is heading towards an economic crisis, similar to that of Greece.

It is no secret that the adverse effects from a fall in global commodity prices have slowed the country’s economy drastically. Yields from LNG exports have been dismal and projected growth rates have fallen short of target.

These results, coupled with the government’s heavy borrowing and spending have inevitably been a cause for concern for Papua New Guineans, fuelled by social media commentators and bloggers predicting that the country is headed towards a ‘Greek Style Economic Crisis.’

Possible outcomes predicted are the Kina further depreciating to the point where it becomes valueless against other currencies.

Bakani addressed these commentaries stating that unlike Greece, PNG is not heavily indebted and the comparisons are unfounded.

It hasn’t been the first time these stark comparisons have been made. In January this year, an opinion piece by Paul Flanagan, a former senior executive in the PNG Treasury, was published online in the Australian Financial Review in which Flanagan blames poor governance and goes as far to state that the country is turning into an autocratic society.

On a more positive note, the Asian Development Bank recently projected that the medium-term outlook for PNG’s economy remains positive despite an expected slowdown this year, with economic growth expected to pick up again in 2018 if short-term macroeconomic management is effective.

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