PNG Macro Environment
KFM believes that real GDP growth should increase from 8.4% in 2014 to levels around 9.0% in 2015 compared to Budget projection of 11.0% which was re-vised in down from 15.5% according to the MYEFO report. The current dry weather conditions brought on by the El Nino continue to affect key sectors in PNG especially agriculture and mining sector with low water levels and crop yields. Inflation is likely to increase marginally from last year’s 6.6% driven by large government spending and the continued downward momentum of the kina against the USD.
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