Posts

Showing posts with the label greece

HUGE HOLES IN PNG 2016 BUDGET - Errors in GDP and External Account Calculations

Image
by
Papua New Guinea’s budget, released on 3 November and rushed through Parliament the same day, could have been so much better. Given the country’s record deficit levels, fiscal consolidation was vital even before the fall in international commodity prices. However, the proposed expenditure cuts do not match the government’s stated priorities of protecting health, education and infrastructure. They are also excessive – even more than those imposed on Greece as part of its structural adjustment program. Further, the budget suffers from factual errors relating to GDP and the external accounts, a lack of revenue effort, and inadequate transparency. This is the first of two posts providing a detailed analysis of the 2016 PNG Budget.


GDP errors

The budget makes a serious error in calculating PNG’s nominal GDP – and this affects all the key ratios and messaging from the budget. The nominal GDP budget estimates assume there has been no fall in LNG or condensate p…