Treasurer eyes strong economic growth

By CHRISTOPHER YANDAWAI

TREASURER Sam Basil intends to formulate and establish a credible macroeconomic and fiscal framework as a foundation for stronger economic growth in the country.

Minister Basil made this comment while delivering his statement on the state of the economy in Parliament recently.

After outlining the status of the economy, Mr Basil said the challenge for the Marape-Steven Government is to ensure fiscal policies and economic management with respect to both the resource sector and the non-resource sector are improved.

‘‘This is required because we have to keep our budget deficit and public debt under control, and also to provide for the lowest cost financing while taking into account the risk involved.

‘‘We have to also keep inflation low because high inflation erodes our people’s standard of living faster than anything else.

“Further, we have to keep our exchange rate relatively stable and competitive to lift business confidence,’’ Basil said.

Minister Basil also highlighted that setting foundation for stronger economic growth will maintain healthy levels of international reserves and maintain low country risk premiums so that foreign partners and investors look to PNG to invest much-needed capital.

‘‘After fiscal policies are in order, we will need to overlay our specific policies, services and projects into this framework to create productivity and economic activity; and plug governance leakages and cut wastage.

‘‘It will also give our people the best chance of unleashing their energies and outputs and achieving the higher incomes and standards of living that they deserve,” he said.

Meanwhile, he said previous government which he was part of, has designed a comprehensive fiscal and financing program embodied in the Medium Term Fiscal Strategy 2019- 2022 and legislated into the Fiscal Responsibility Act targets.

‘‘This framework has been designed in partnership with the IMF and World Bank and has been accepted by the International Financial Institutions and the International Financial Markets.

‘‘The success of World Bank Budget Support, the ADB Budget Support and the Inaugural Sovereign Bond are evidence of success of this which we should be proud of,’’ Basil reiterated.

He said the ratings agencies have highlighted the credibility of the framework and it was interwoven into the 2018 to 2019 national budgets which aimed to lift government revenues and contain non-essential spending.

‘‘It also aimed to divert spending to the Government’s social and economic project priorities particularly in health, education and the district and provincial services improvement programs.”