by Bridgette Komatep – EM TV, Port Moresby
Treasury Minister Patrick Pruaitch, in a statement last week, said the country’s economic growth has been the best in three years.
Despite the slow global growth and falling commodity prices, with gold prices down for four years in a row, Mr Pruaitch says that PNG’s growth rate has improved since 2011.
The government is expected to table the 2015 national budget tomorrow. Prior to bringing down the O’Neill government’s 2015 national budget, Minister Pruaitch says the country’s gross domestic product growth of 8.4 per cent is the best since 2011 when PNG had an almost 11.1 per cent growth, mostly fuelled by the PNG LNG project.
In 2011, the LNG construction had a rapid build-up phase, resulting in the early LNG export to Japan three months ahead of schedule. In July this year, Treasury released a mid-year economic and fiscal outlook indicating a lower forecast of tax revenue from the mining sector.
There were warnings of deficit budget blowouts from local and overseas commentators. However, Minister Pruaitch says good fiscal planning from Treasury, along with gains from the LNG venture, resulted in a budget deficit of only K77 million higher than the projected 2014 budget of K2.35 million. Minister Pruaitch will release the full details in the 2014 supplementary budget in parliament tomorrow.
He has brushed aside critics speculating the 2014 deficit will harm PNG’s medium and longer term prospects and is confident the supplementary budget will prove this. The government boasts that it had strategically implemented the large budget deficits in 2013 and 2014 that worked out as planned to cater for the large unemployment and expenditure impacts faced after the completion of the PNG LNG project.
As a result, construction has proven one to be one of PNG’s better performing sectors that has subsequently increased company tax. In 2015, PNG’s growth rate is predicated to be at 15.5 per cent instead of 21.2 per cent as projected earlier. All in all, the Treasurer is confident PNG’s budget will reflect the economy in fine shape moving forward to achieve a balanced budget in 2018.