Wednesday, July 04, 2012

PNG economy to grow strongly over medium-term


THE PNG economy is expected to grow strongly over the medium term, according to Treasury acting assistant secretary – forecasting branch Nancy Lelang, The National reports.
 She told the monthly economic and public sector programme seminar at the Holiday Inn last Friday that in putting together PNG’s fiscal outlook, Department of Treasury formulated projections for government’s total revenue, grants, total expenditures, recurrent expenditures and development budget expenditures.
“Over the medium term 2013 to 2016, government revenue is expected to remain fairly stable, largely because of stable non mineral revenue offsetting the variations in mineral revenue over the medium term,” Lelang said.
Fresh vegetables on sale at Leron in the Markham Valley of Morobe province last month.-Nationalpic by MALUM NALU

“Government’s expenditure is expected to stabilise over the medium term in line with the projected revenue outlook
“Expenditure will be focused on government’s medium term development plan (MTPD) priority areas of health, education, law and order, and transport infrastructure.”
She predicted:
  • The PNG economy is expected to grow strongly over the medium term;
  • The outlook for government’s total revenue is to remain stable over the medium term;
  • In contrast, mining revenues are varying over the medium term. Mining revenue is likely to decline reflective of the closure of Ok Tedi mine in 2015;
  • The first lot of the PNG LNG project dividends is expected in 2015. These are sufficient to replace the Ok Tedi mine and the depleted oil field revenues to support government expenditure;
  • Government expenditure is expected to be stable in line with projected revenue over the medium term;
  • Government debt is expected to be in line with the medium term debt strategy of 30% of gross domestic product;
  • The new medium term fiscal strategy (MTFS) will be framed in light of expected low mineral revenues; and
  • Over the medium term, the mechanisms to be used to promote PNG’s development is through macroeconomic policies, Industry reviews and reforms,  prudent public debt management, and through the usual annual budgetary allocations

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