Weak recovery in the global economy and its impact on international commodity prices continue to affect most of PNG’s major exports during the September quarter of 2019.
This was revealed in the Bank of Papua New Guinea’s Quarterly Economic Bulletin for 2019.
According to the Bank of Papua New Guinea’s Quarterly Economic Bulletin for 2019, most prices and production of agricultural commodities fell, affecting foreign exchange inflows into the domestic market.
Its spill-over effect to the non-mineral sector was evident as import orders continue to remain high.
During the quarter, the weighted average kina price of PNG's export commodities, excluding LNG, increased by 3.3 percent.
There was an increase of 4.8 percent in the weighted average price of mineral exports, reflecting higher kina prices for gold and nickel.
Excluding log exports, the weighted average kina price of agricultural and marine product exports declined by 6.3 percent, reflecting a decline in international prices.
With the shortfall in foreign exchange, coupled with the Government’s cash flow constraints, the non-mineral sector showed signs of slowdown, reflective of the decline in the level of non-mineral private sector employment.
The Bank’s employment index shows that the total level of employment in the formal private sector declined by 2.6 percent.
During the quarter, the kina exchange rate remained relatively stable. Quarterly headline inflation increased by 0.7 percent while annual headline inflation was 3.3 percent.
An overall balance of payments deficit of K999 million for the nine months to September 2019 was recorded.
Gross foreign exchange reserves at the end of September 2019 was K6,509.4 million, sufficient for 4.7 months of total and 8.6 months of non- mineral import covers.
Meanwhile, total public (Government) debt outstanding as at the end of September 2019 was K28 billion (K28,070.4 million), reflecting increase in both external and domestic debt during the quarter.