Photo credit: Australia Pacific Security College - Sir Rabbie Namaliu
Businesses of Papua New Guinea’s private sector have expressed mixed views regarding the country’s economic outlook.
The market prognosis, according to Kina Asset Management Ltd, remains unpredictable.
In the company's recently issued 2021 annual report, board chairman Sir Rabbie Namaliu emphasised this.
“In my last report to shareholders, I noted that the company was cautiously optimistic about the future,” he said. “In the US and parts of Europe, accommodative monetary and fiscal policies, high Covid-19 (Coronavirus) vaccination rates, and the relaxation of restrictions on economic activity have all combined to facilitate a strong economic recovery.
“In Australia, federal and state governments, who had (then) been successful in controlling the spread of the virus, were more cautious than their counterparts in the US and Europe in easing restrictions.
“In other parts of the world, notably India and some other developing countries, the pandemic had only just begun to seriously affect the population.
“At the time of writing, the outlook for markets is again uncertain.
“As many countries are removing restrictions on economic activity, outbreaks of the Omicron variant of the Covid-19 have added to supply chain disruptions, which have in turn added to rises in the prices of a wide range of commodities and goods.
“Inflation outcomes have been much higher, more persistent, and more broadly based, and central banks globally have begun to review monetary policy settings.
The conflict in Eastern Europe – in addition to the terrible human cost – has added to this uncertainty.”
Rio Fiocco, head of the Port Moresby Chamber of Commerce and Industry (POMCCI), agreed, saying the existing economic climate had no benefit.
Businesses were anticipated to wait for a final investment decision (FID) on the Papua LNG (liquefied natural gas) project to advance into the construction phase, according to Fiocco.
“It is likely to remain the same as it is now for at least the next 12 to 18 months,” he said. “Businesses don’t see any real upside until the final investment decision is made on the Papua LNG project and start construction phase which is likely to be around 2024.”
Fiocco went on to say that any new projects in Port Moresby were vital since they offered new job prospects during the building period and later on.
The country's economy, according to Nambawan Super Chairman Reginald Monagi, is poised to rebound following the obstacles posed by the Covid-19.
Reference: Luma, Dale and Mauludu, Shirley. The National (3 June 2022). “Economic future ‘uncertain’”.
