Papua New Guinea, like the rest of the world, has been plagued with external factors affecting economic growth.
A drastic drop in global commodity prices; China’s moderating growth; and Brexit, have proved to be unfavorable hurdles.
Over the past months, the private sector has expressed their concerns about the state of the economy, and the persistent pressures on foreign currency, urging the government to put measures in place to curb government spending.
This morning at a business breakfast hosted by the Business Council of PNG, the private sector was given an outlook of the country’s economy over the coming months.
The slowdown in the economy has been quite noticeable, with the private sector feeling the brunt, especially when dealing with the lack of foreign exchange.
Michael Penrose, business council vice president, when addressing the audience, gave some examples of clear indicators of the economic strain.
Despite the negative picture painted of the coming months, businesses remain committed to finding solutions during these tough times.
According to the Department of Treasury, gradual consolidation will return the economy to a fiscal sustainable path, maintaining debt to GDP at a sustainable level and return to a balanced budget by 2020.
Although the medium-term outlook for PNG’s economy plans for modest increase in revenue and expenditure until 2020; according to the Asian Development Bank, forward revenue projections may not be realistic without the fiscal consolidation the government has committed to, which may result in PNG likely to miss its fiscal targets.