PNG growth may be unstable due to second wave: BSP

Bank South Pacific says while PNG’s 2021 economic growth is projected to recover to 3.5%, growth “may be unstable owing to external and domestic factors and strong headwinds from the COVID-19 second-wave.”

In its quarterly report (Q1 2021), BSP notes that growth will depend on the speed of domestic and international vaccine rollouts, demand for exports and “government efforts to improve economic and fiscal resilience to external shocks.” The quarterly report also notes:

  • Pogera Gold Mine is on track to resume operations this year
  • Ok Tedi Mining Ltd (OTML) has resumed operations and is forecasting a solid profit outlook for the year
  • PNG’s liquified natural gas (LNG) industry is forecast to expand and be profitable this year even if oil prices remain subdued.
  • The PNG Kina is likely to continue its gradual fall against the US dollar but there should be improved stability in the Kina/Australia dollar cross rate
  • That while PNG’s economy is expected to rebound, growth in other South Pacific island nations is expected to remain around 9% below pre-pandemic levels.

The update quotes Group CEO Robin Fleming as saying in relation  to Pogera: “The signing of the agreement between the Government and Barrick has been well received by the PNG business community and accordingly, the announcement gives business much needed confidence in the process of rehabilitation of the mine starting and re-commissioning this year.

“Barrick’s stated commitment to funding the costs associated with re-commissioning is also positive, and preliminary work required to move the mine towards starting operations will bring foreign exchange into the country and boost local and domestic economic activity.”