Bank of Papua New Guinea (BPNG) Governor, Ms. Elizabeth Genia, recently gave key insights into the nation's economic challenges against the backdrop of global economic projections.
The Central Bank chief focused on the resilience of Papua New Guinea's private sector amid formidable challenges and crucial strategic shifts in policy.
The private sector emerged as the linchpin of PNG's economic strength, as its resilience was deemed vital amidst trying times.
Governor Genia underscored the critical role businesses play, particularly in light of external economic challenges. With challenges both within and beyond BPNG’s control, the crucial proactive measures become evident to address, she said.
Ms. Genia said: “The private sector is the driver of growth in Papua New Guinea, and your resilience through these challenging times is critical to PNG and to PNG’s economic wellbeing.
“The resilience of businesses and of households, in light of the significant economic challenges we are facing, is being tested.
“Some of these challenges are caused by external factors outside of our control. Those factors within our control are the focus of our work at the Bank of Papua New Guinea,” she added.
The March 2024 Monetary Policy Statement (MPS) laid bare a comprehensive assessment of both global and domestic economic dynamics.
Globally, while the International Monetary Fund (IMF) projects modest growth, with estimates of 3.1% in 2024 and 3.2% in 2025, driven chiefly by a robust US economy, challenges persist.
These growth projections, though positive, remain below pre-COVID averages.
Domestically, the economic landscape reflects a mixed picture. Amidst forecasts of modest GDP growth, structural challenges such as foreign currency shortages and transportation costs emerge large.
However, lingering effects of civil unrest and subdued consumer spending underlines the complexity of the challenges at hand.
Governor Genia's articulation of the monetary policy stance underscores a nuanced approach tailored to PNG's unique challenges. Measures such as liquidity management instruments and adjustments to policy rates reflect a commitment to navigating economic challenges while fostering stability.
PNG stands at a pivotal economic position, poised between challenges and opportunities. By harnessing the spirit of innovation and collaboration, the nation can chart a course towards sustained economic growth and resilience. Governor Genia's statement emphasized taking challenges head-on, ensuring a stable environment for businesses to thrive.
“Over the next six months, we will need to make some tough policy decisions, and in doing so, we will feel some pain, in the short term, for what we are working towards in the longer term.
“Many of the challenges we have faced in the past have been left unaddressed in the hope they would somehow resolve themselves without the need for difficult decisions,” she said, emphasizing BPNG’s work through the IMF Program along with the government.
“The technical assistance we have received at the BPNG in working with the IMF has been of great benefit to us and we look forward to the IMF’s next mission to PNG which is later this month.”
“There are some challenges ahead of us but nothing that can’t be addressed and overcome. The measures we are introducing, with the exchange rate and the overall monetary policy framework will take time to achieve their desired outcomes.”
