KFMIC Report: Wednesday, 18 November 2015

PNG Macro Environment

Following the release of the 2016 Budget, KFM maintains that GDP growth for this year should be arround levels of 9.0%. The Supplementary Budget estimate for 2015 GDP growth of 11>0% was revised down to 9.9%. According to the budget, Expenditure cuts to the 2015 Budget of c.K1.4bn were made in response to drop in commoditity revenues. PNG’s agriculature, utilities and mining sectors remain the key sectors affected by dry weather conditions brought on by El Nino. KFM maintains its view that inflation will be arround 6.0% mainly driven by the continued downward momentum of Kina against the USD.

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