Economist: 2021 May Also Be a Difficult Year
According to PNG Institute of National Affairs Director Paul Barker, 2021 would also be another difficult year.
In giving an outlook for the year, he said, “Demand for goods and commodity prices have increased, and the rollout of several vaccines provides grounds for optimism over constraining the coronavirus during the year, and particularly safeguarding the most vulnerable.”
He added that the pandemic has caused major damage such as revenues and income and has also increased the forecast deficit to K6.6 billion for 2020 - in spite of the major cuts for the public and private sector operations.
“The Government secured highly concessional funding under the Covid-19 global response from the International Monitory Fund (IMF) and other international sources, with K4.6 billion secured from external borrowing (US$400 million (K1.4bil) from Australia, US$364mil (K1.2bil) from IMF and US$500mil (K1.7bil) from ADB sources) and K2bil envisaged from domestic borrowing,” he said.
He continued, “These may permit some return to a new normal, including restoration of economic activities and jobs, including in PNG. Addressing global challenges and tensions will be a major issue, most notably climate change and destruction of the major sinks, such as forests and marine habitats, other environmental threats, as well as growing geopolitical and trade tensions, including in the Pacific. For Papua New Guinea, a major focus must be on kick-starting the economy and the long static or declining job market, by addressing major business and investment constraints and boosting domestic and foreign investor confidence. But, also encouraging greater local participation and diversity of activities using local capital and skills.”