PNG expects more money for 2008
Fri Aug 01, 2008 4:00pm
Papua New Guinea's money supply is expected to outstrip expenditure,
leaving behind a large surplus by the end of this year.
Its total revenue and grants is now estimated at K8.6b, a K1.4b
upward revision of the 2008 budget estimate.
Development expenditure on the other hand is expected at K1.9b, some
K49m above the budget estimate.
Total public debt will depend on the composition of the 2008
supplementary budget however assuming all additional revenue is
allocated to debt repayment, outstanding debt is forecast to be around
K4.7b, lower than the budget estimate of K6.2b.
Our Finance Reporter said a supplementary budget is expected anytime
soon and although no figures are being thrown around, the current
K1.4b surplus should form the core of it.
These results are based on the Government's mid year economic and
fiscal outlook report.
Economy predicted to grow
Papua New Guinea's (PNG) economy is predicted to grow between 7.3 and
7.6 per cent this year, the highest since 1993 against the 2008 budget
forecast of 6.6 per cent.
But whilst that is good news, inflation is expected at 9 and 11.5 per
cent, drawing strong urging for closer monetary and fiscal
coordination between the Government and the Bank of PNG to restore
price stability.
Both the Bank of PNG and the Government have attributed these revised
forecasts probably for the first time on higher than projected growth
in the communication and agriculture sectors and other non mining
sectors although gold, copper and oil did contribute superbly.
Inflation is singled out as the major threat to the country's macro
economic stability especially from oil and food prices, imported
inflation, exchange rate depreciation, wage and government expenditure
increases and unforeseen international and domestic shocks.
Whilst the Bank of PNG has urged the Government to prudently manage
its fiscal operations, it has set itself the task of conducting the
country's monetary policy within the reserve money framework.
These latest forecasts are based on the Government's mid year
economic and fiscal outlook and the Bank of PNG's latest monetary
policy statement.
Figures draw expats interest
The two different figures quoted by the Government and the Bank of
PNG on economic growth and inflation has attracted attention from an
interested expatriate.
The Government has placed economic growth at 7.3 per cent, 0.3 per
cent less than what the Bank of PNG has quoted in its monthly Monetary
Policy Statement released on Wednesday.
The Government in its mid year economic and fiscal outlook also
forecasted inflation at 11.5 per cent as against the Central Bank's 9
per cent, leaving a gap of 2.5 per cent.
It is the gap in inflation especially that the expatriate is
concerned with, saying 2.5 per cent is significant.
He also wanted to know why both parties, who should be working
together, do not have corresponding figures especially on vital issues
affecting the country.
He said the figures would have been taken from a basket of goods but
it appears there are now two baskets on which the figures are
separately quoted. |
