Bakani defends Government’s economic status

Central Bank Governor, Loi Bakani has defended the Government and the Bank of PNG in managing the affairs of the country after receiving criticisms by over the past year.

Speaking at the 32nd Australia-PNG Business Summit in Cairns recently, Bakani said in most instances critics are being misrepresented.

He said the new nominal Gross Domestic Product data released by the National Statistical Office (NSO) at end March 2016, showed that the size of the economy is much bigger than earlier estimated.

“We have a very long streak of GDP growth lasting for the last 14 years. In the last five years 2010 to 2015, Nominal GDP grew from K38.6 billion to K64.2 billion, a growth of 69% or on the average by 13.8% per annum.”

Bakani added that the new GDP outcomes also refutes the claim of very high deficits to GDP ratios, which the commentators used in their statements that the Government and the Central Bank are driving the country into bankruptcy.

He said the actual average deficit for the five years was 3.6%, and not the 4.9% as claimed by the critics.

“The earlier released budget deficits for 2014 and 2015 of 7.3% and 5.0% of GDP, respectively, are now revised to to 5.3% and 3.9% of GDP.”

He stressed that no deficit is justified if it is not used to fund priority areas.

“The Government of the day defined the priority areas as Health, Education, Law and Order, Infrastructure, Economic Sectors especially Agriculture and Rural Development for inclusive growth.

“If we add up the expenditure in those five priority areas as part of the total expenditure in the last five years, the actual expenditure varies from year to year, but the average was above 68% of total expenditure.

“This is a strategic turnaround from past years and PNG stands to benefit from their social and economic returns in future.”

Freddy Mou