Business sentiment is apprehensive due to service disruptions, lower foreign exchange (FX) inflows, likely delays in project commencement and the kina depreciation, according to BSP’s Quarter 3 2023 Pacific Economic & Market Insights report.
BSP’s Group General Manager for Corporate Banking, Mr. Peter Beswick, says “recurring power and water supply cuts along with lack of FX, continues to impact business operations.”
Mr. Beswick adds, “that the kina’s gradual depreciation against the US dollar will disadvantage importers and may contribute towards inflation for consumers and the broader business sector.”
Despite this, Mr. Beswick expects that the recent granting of the Special Mining Lease to New Porgera Limited (NPL) is likely to boost economic activity in Q4-23 provided Barrick can fully resume Porgera gold mine operations before year-end.
The medium-term outlook remains optimistic with Mr. Beswick adding, “consumer spending remains robust in Q3, with our BSP PNG EFTPOS transaction volume increasing by 10.6% to K2.0b. The latter can be attributed to improved transaction numbers and higher prices, given current inflation levels.”
Continued business confidence is dependent on the timely commencement of the resource projects (Porgera, Papua LNG, Wafi-Golpu, P’nyang and Pasca A).