A Regional Economic Report saysthe government needs to put in place provisions to protectthe economy from future shocks.
The report isthe tri-annual economic review of Asian Development Bank’s Pacific developing member countries.
It’says asthe construction phase of LNG winds down,the government needs to slow – down on spending.
The ADBereport says Papua New Guinearsquo;s medium term growth outlook for 2013 is 5.5 percent and 6 percent in 2014 .It remains strong butthe report says steps must be made to with’stand future economic shocks.
As LNG construction phase winds down, economic growth in PNG will be supported by increased government’spending and output from mining operations.
The report says it is critical that government plans to increase investment in national infrastructure and maintain balanced social services while maintaining fiscal buffers to protecPNG’s economy.
Key recommendations fromthe report include: slow spending to reducethe size of future budget deficits, shifting focus of spending towards routine maintenance of existing capital assets, restructure domestic debt portfolio to reduce how often government needs to refinance its debtoensuring all public debt is created and recorded through annual budget process among thers.
ADBeReports states thatthese policy recommendations will be vital in building upthe country’s economy resilience. It will avoidthe boom-bust cycles of economic growth that have plaguePNG’s economic development inthe past.
Beidgette Komatep, National EMTV News
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