Prime Minister Marape admits inflation is an issue

Consumers will buy less when shopping this festive period, as prices of goods continues to increase.   

Jetting in across the Coral Sea today, after a bilateral meeting with his Australian counterpart and addressing the PNG resource and investment summit in Sydney, Prime Minister James Marape said “inflation is an issue” because the country is an “import dependent economy, so in the midterm to long term we are working on import replacement.”

He said increasing the income tax-free threshold to K20, 000, from K12, 500, shows the Marape –Rosso Government’s support to lower income earners.

Mr Marape added that “by 2027, remodeling of corporate income and personal income tax structure” will be introduced by his government before the national elections.  

The Bank of PNG monetary policy released in September states that “with global inflation easing, PNG’s headline inflation has trended downward,” but “core inflation measures indicate that inflationary pressures remain.”

“The Consumer Price Index (CPI) for the June quarter of 2023, published by the National Statistical Office, showed the annual headline inflation at 1.4 percent, compared to 1.7 percent in the March quarter.

“The Bank forecasts annual domestic inflation to be around 3 percent for 2023, increasing to around 4 percent in the medium term.”

Bank South Pacific earlier reported that weaker Kina against the U-S dollar will increase cost of imports and may contribute towards inflation for consumers and the broader business sector.

But the increase inflation in the country, has not stopped people to cut down on their spending.

B-S-P recorded, consumers spent more in the third quarter of this year, with EFTPOS transaction volume increasing by 10.6%, amounting to K2 billion.