According to the BSP financial group’s quarter 4 of 2023 Pacific Economic & Market Insights Report, rising law and order issues in the country which have caused disruption to services, muted business confidence.
BSP’s group General Manager for corporate banking, Peter Beswick, says “the sequenced depreciation of the PGK/USD mid-rate beginning in May, added to the unease in the business community, with questions being raised on whether the timing was right for the PGK/USD depreciation in 2023.”
Mr Beswick says business sector outlook grew optimistic towards the end of Quarter 4 of 2023, as news of Porgera mine’s recommission and signing of the Final Investment Decision (FID) for Papua LNG in 2024 sparked positive business sentiment.
Whilst commenting on business sentiments in 2024, Mr. Beswick states that, “the events that transpired on 10th January 2024, severely impacted business sentiment and serves as a reminder of the rising law and order issues PNG face, as the lack of employment opportunities, continuing urban migration and rising cost of living create a focal point for unrest.”
He further outlines that there are emerging concerns of political uncertainty, as the vote of no confidence becomes permissible in February and remarked that whatever the outcome, government must work towards repairing business confidence and deliver on their announced “black Wednesday” relief package.
Mr Beswick concludes that the signing of the Papua LNG FID will be important in boosting business morale and be the trigger point for an extended investment super-cycle for PNG.
