Photo Credit: UMM PNG
The Bank of PNG (BPNG) expects headline inflation to be about 4% this year, down from 5.1 per cent in December of last year.
The raw inflation amount provided by the consumer price index is known as headline inflation.
Inflation in Papua New Guinea climbed from 2.9 per cent in 2019 to 5.1 per cent in December 2020, according to BPNG governor Loi Bakani.
“This was because of the impact of the Coronavirus (Covid-19) pandemic with rising prices for seasonal products as the supply chain of some of these products went up and prices in medical services also increased,” he said.
“We are lucky at the moment because inflation is not that high.”
However, he said the rates did not reflect the real people faced every day.
“This statistical indicator of what the movement of prices is over time, (and) does not tell you the real prices on the shelves, the markets, service fees,” Bakani said.
“They are totally two different things.”
He stated that the government continues to confront budgetary problems in 2020 as a result of poor tax collection and higher spending compared to 2019.
Bakani attributed this year's economic rebound to the relaxation of lockdown measures, fiscal stimulus in key economies, vaccine rollouts in the second half of 2020, and new business models.
However, he added, there are still concerns about the development of a new Covid-19 strain, the growing mortality toll, vaccine rollout pace, and the efficiency of different policy initiatives.
He cautioned companies and individuals against lowering their guard.
Reference: The National (24 August 2021).”BPNG predicts headline inflation to be around 4pc”.
