2022 National Budget

Impact Of War

According to the Bank of Papua New Guinea (BPNG) Monetary Policy Statement, the deficit equates to 5.9 percent of projected 2022 nominal GDP. To finance it, the Government plans to raise K3,744.7 million in net external borrowing and K2,240.0 million domestically.

Economy Expected To Rebound

According to BSP’s 2021 Quarter 4 Pacific Economic and Market Insight, the 2022 National Budget and the Asian Development Bank (ADB) estimate real GDP growth in 2021 at 1.5% and 1.3%, respectively. In 2022, the PNG Government forecasts 5.4% growth underpinned by large public infrastructure spending. There is potential for further upside from election-related spending, while the resurgence of COVID and low vaccination rates in the country pose significant downside risk.

PNG Economy Surpasses K100b In 2022

“Our vital non-resource economy is expected to increase by 3.5 percent in real terms, with election-related spending expected to provide a boost to activity in the non-resource economy. Including the mining sector, growth is estimated to be 5.4 percent.

This reflects the expected recommencement of Porgera and improvements in Ok Tedi production. Inflation in 2022 is expected to be 5.6 percent,” he said.

Sir Julius Raises Concern on Budget

He predicts the complete overhaul of the National Budget after 2022 National General Elections, Sir Julius gave his views on the budget after the public have requested for an insight into whether there was any practicality or truth in the K22 billion budget, passed by Parliament last week.

Health And Education Funding Commended

Despite this, he has commended the Government for allocating more funding to the health and education sector - priority areas that the previous government had embarked on previously.

“I am happy that the Government has now acknowledged Free Education to help our people in the rural areas.

“This is not something for us to play politics about. It should not have been discontinued in the first place but hopefully it will benefit our people,” O’Neill said. 

Projected GDP A Milestone

“This is compared to K81 billion in 2020 and K93 billion in 2021, a K3.1 billion increase against the budget of K90 billion,” says Chair of the Plans and Estimates Parliamentary Committee and Governor for East Sepik, Allan Bird.

“The expected GDP growth is 5.4 per cent against the world average growth of 6.3 per cent projected for emerging economies around the world. Our economy is classified as emerging economy.”

Bird said the 5.4 per cent projected growth is conservative when compared to what the world is predicting.

Opposition Calls For Review Of 2022 Budget

Shadow Treasurer, Joseph Lelang responded to the 2022 money plan saying it lacks integrity and transparency. 

Lelang has described the 2022 money plan as unrealistic and an unfair plan in the distribution of funds, given the country’s economic challenges.

He added that due diligence was not provided when allocating money, pointing out also that the current Government has not achieved its Medium Term Fiscal outlook 2019-2022.

Opposition receive Volume 1 budget documents late

According to the Leader of Opposition Belden Namah, a copy each was slipped under their office doors on Monday November 29. 
Namah is now backing the call for a review to the 2022 budget, after sighting these documents. 
He said the focus of the 2022 Budget is not rural-based and asked that government consider reviewing it, and not put more burden on the people to fund it.
However the National Planning Minister believes the money plan was set up to address challenges in the rural areas.

Budget Needs Links

Bird made these comments while delivering the committee’s response to the K22 Billion for 2022.

“The committee feels that there needs to be more interaction between the commission, treasury, the Department of National Planning and for better stakeholder engagement in future budget formulations to take into account input from all key stakeholders,” said Bird.

Bird also said that the budget allocations must be aligned with national visions.

Budget Focuses On Families, Businesses

The Money Plan will also see increased development and capital funding to high priority programs and ensure sufficient funding for key social sectors to stimulate economic growth.

It also supports the successful delivery of 2022 Budget. The total Budget of K22,174.8 million, 9.3 per cent higher than 2021 Supplementary Budget.

With the revenue Envelope of K16,190.2 million, 18.4 per cent higher than 2021 Supplementary Budget, the fiscal deficit is K5,984.7 million that is 5.9 per cent of 2022 GDP.