Bank of Papua New Guinea predicts the annual inflation rate will reach 7.5 per cent in 2017 because of excessive government spending to fund the 2017 National Elections and 2018 APEC meeting.
The Bank of Papua New Guinea Governor Loi Bakani stated in its Monetary Policy Statement for the month of September 2016.
The statement showed that the inflation continues to increase since last year.
“Annual headline inflation was 6.8 per cent in the June quarter of 2016, up from 6.5 per cent recorded in the March quarter of 2016, and 6.4 per cent in the December quarter of 2015.
“The increase was primarily driven by price increases for betelnut, fruits and vegetables, cereal and rentals. Increase in these seasonal items and cereals were mainly due to supply constraints and the depreciation of the Kina.
“The inflation outcomes are still considered manageable but the Bank is mindful for the upward trend in inflation and the projected increase, and may adjust its monetary policy stance as necessary,” Bakani stated in the September Monetary Policy Statement.