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PNG FACES A TOUGH ROAD AHEAD

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by PAUL FLANAGAN

The press release from the latest mission of the world’s International Monetary Fund (IMF) – see here – highlights the difficult road ahead for PNG in dealing with recent years of bad luck and economic mismanagement.
Challenges On the fiscal front, the IMF considers that the government will fail in the Supplementary Budget to bring the 2017 budget deficit back to the target of 2.5% of GDP. Rather, it estimates the deficit will be “a little over 3%” – so a gap of some K370 million relative to the 100-day target.

The goal to reduce the debt to GDP ratio back to the legislated level of 30% as part of the 2017 Supplementary Budget is also recognized as infeasible. Instead, the suggestion is a medium-term objective of moving to a balanced budget by 2020 (and GDP growth will work to reduce the ratio).

So the first two targets in new Treasurer Abel’s 100-day plan are likely to fail.

Expected growth is also wound back from the 2.7% estimate in 2017 down to 2.4%.

Positive proc…

2017 BUDGET BLOW-OUT

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PRESS RELEASE by Rt. Hon SIR MEKERE MORAUTA MP

Former Prime Minister and Member for Moresby North-West Sir Mekere Morauta said today that at last some members of the PNC Government have admitted that the Papua New Guinea economy is in difficulty.  Sir Mekere referred to the media statement by Deputy Prime Minister and Caretaker Treasurer Charles Abel, who said that the focus of the government in its first 100 Days would be on “economic recovery”.

Sir Mekere noted that this was an interesting admission and use of words by Mr Abel, because the Prime Minister has consistently refused to recognise that the economy is in recession, and has mismanaged public finances in such a way that has allowed the recession to intensify.
“My advice to Mr Abel is that before he launches into any “recovery” measures, he needs to repair the budget and reform his Prime Minister and curb his extravagant and uncontrolled spending and borrowing,” Sir Mekere said.

“The non-mining sector, on which the majority o…

PNG LOSES 1.5 BILLION KINA IN ILLEGAL UBS-OSL LOAN REFINANCING

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