Second LNG likely to improve economy

A final investment decision on the Papua LNG Project is the likely catalyst for PNG’s economy to overturn the current slump and improve the current foreign exchange shortage.

Bank of South Pacific CEO, Robin Fleming, says the country’s economy is expected to face another 12 to 18 month slump. However, there is recognition by the business community that an improvement will be witnessed once the second LNG Train project is confirmed.

He said this was the general consensus following a shareholder board meeting in Lae last month.

Fleming said there remains a higher level of confidence in the project moving ahead by the end of 2018, following announcements during the recent inaugural Petroleum and Energy Summit in Port Moresby,

“We feel that there won’t be any major change in the economic conditions over that particular period, which means GDP growth around about the two to two and a half per cent; agriculture still has the potential to provide some better foreign exchange; but the key catalyst towards a rebalancing of the foreign exchange paradigm would be towards the end of next year,” Fleming said.

He added “It will be another 12 to 18 months of difficult conditions or certainly less buoyant conditions, particularly many of them (businesses) recognise that the potential for PNG still remains strong once you get to a financial investment decision with the next LNG project.”

BSP recently announced an impressive 2016 net profit after tax (NFAT) of K642.5 which is 16 per cent increase from K532 million in 2015.

And despite the trying economy, PNG was BSP largest contributor with K52 million while the next best contributors were BSP Fiji with K16 million, and BSP Solomon Islands, K13 million?

Fleming said BSP will continue its strategic approach to see further growth by:

  • Cementing its domestic leadership position;
  • Broaden product footprint;
  • Insurance; and
  • Grow acquisitions in the Pacific and Southeast Asia Region

 

 

Author: 
Cedric Patjole