This statement was emphasized by Treasury Secretary, Dairi Vele who illustrated a snapshot of the country’s economy in his presentation today at the 2016 two-day Leaders’ Summit, currently underway in Port Moresby. The positive tone by Secretary Vele comes amid censure of the country’s economy, which recently has been described, both locally and internationally, as an economy based on huge-budget deficits into the billions. “Initially the plan was for us to get back to a balance budget in 2017 and for us to do that – it would be like pulling the hand-break while driving in full tilt.” “We’ve reviewed the prevailing economic conditions and made the conscious and tough decision to take a slower and a more gradual approach to reaching a balance budget which under the new supplementary budget for last year is looking at us getting back there in 2017.” “Touching on our debt to GDP ratio, our law – we have fiscal laws which legislate that we have to stay between 25% and 30% throughout the different stages.” “We haven’t arrived at 30% on our own; we have done this specifically so we recognize the issues of implementation and the sins of the past.” “The issue there is for us to get back to zero – a balance budget.” “Government is not broke but it has a management issue,” said Secretary Vele. Secretary Vele explained a 9.9 per cent growth of the PNG economy last year, which was driven by the ramp up of the full year of LNG production. While the gas sector has supported this growth, the mining and quarrying sector is estimated to have contracted due to the shutdown of the country’s key mines. The negative impact, according to Secretary Vele, also had a ripple effect on sectors within the non-extractive industry. “In addition, activities in the agriculture and the other non-mining sectors of the economy are also anticipated to have weakened in 2015.” “Low commodity prices, adverse effects of droughts and the shutdown of the Ok Tedi mine have provided setbacks to growth in these sectors in 2015,” Secretary Vele said. Secretary Vele said the country’s 2016 economy performance is predicted to be encouraging but won’t have the same strength as 2015. “In 2016, growth is still projected to be positive but not as strong as 2015 and the past eight years." “This is because activities supporting growth such as higher commodity prices and construction of the LNG gas project have come off in addition to LNG production reaching its full capacity and commodity prices trending at low levels.” “However, the economy will continue to be supported by the traditional drivers such as the agriculture forestry, fishery and the mining sector with Ok Tedi expected to resume production in 2016. “The economy in 2016 will also be supported by the anticipated pick up in the global economy and the preparations for the APEC 2018." “PNG Government is not broke,” says Treasury Secretary
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