IMF Warnings on Slower Global Economic Growth Makes Stability and Confidence Even More Critical – PM O’Neill
Speaking on the eve of the no confidence motion to be voted on in the National Parliament tomorrow, Mr O’Neill said the world economic outlook had been made significantly more uncertain by a number of factors, including the decision by Great Britain to leave the European Union.
“Some key world commodity prices are recovering slowly, and that fact is adding to general uncertainty in the world economic outlook for this year and next year,” he said.
Mr O’Neill said Papua New Guinea was seeing real ‘green shoots’ of recovery from the impact of lower commodity prices with a number of major oil, gas and mining projects continuing to progress towards the final approval and construction stages.
“The Bank of Papua New Guinea has pointed to private sector growing in the first quarter of 2016, compared with a decline in the December quarter of 2015.
“Business surveys in recent months point to increased confidence in the business sector even though there are areas, such as construction, where conditions remain very challenging.
“This year we will achieve 4 per cent GDP growth which is high by prevailing world standards.
“As the construction phases of our next major gas project, Papua LNG with TOTAL SA, and major mining projects such as Frieda River kick in next year, I am confident GDP growth will lift strongly, and we will see a significant boost in employment and activity in the small business sector.
“What the warnings from the IMF make clear is that factors over which we have no control whatsoever are a challenge to world economic growth, and world trade,” he said.
“As a trading nation, especially in LNG, as well as minerals and agricultural products, we need a growing world economy, and stronger trade in commodities, and higher commodity prices, to maximise the recovery in our domestic economy.
“I am confident that when we have the confirmation of strong, competent majority government after tomorrow’s vote in the National Parliament, we can build on the early signs of economic recovery, and lay the foundations for the investment spending in the gas, mining, agriculture and other sectors we need as a nation,” the Prime Minister said.
“The Papua LNG Project will create 13,000 jobs during the construction phase and provide a significant boost to economic growth, and the health of businesses large and small,” he said.
Mr O’Neill said one impediment to the economic recovery continuing was political instability and community disruption and disorder.
“Investors, both local and overseas, want certainty and when you have a total capital investment running into tens of billions of kina, such as with the Papua LNP Project, they are surely entitled to it,” he said.
Mr O’Neill said the IMFs caution could not be ignored.
“It simply means political stability and good government are absolutely vital if we are to navigate an uncertain global economic environment, and build on the improvements in the domestic economy that have been achieved this year.”
“There is much more to be done – and a strong united national government supported by a united parliamentary team – is the only way to deliver on the opportunity we have today and tomorrow, the Prime Minister concluded.
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