In a recent report by the Acting Governor of the Bank of Papua New Guinea (BPNG), Benny Popoitai, PNG is experiencing domestic inflation and increased import costs due to global price rises.
Mr Popoitai noted that the war between Russia and Ukraine had put considerable pressure on the prices of food, fertilizer, and crude oil, as both countries were key producers of these products. The effects of the conflict were being felt around the world and driving inflation.
“The increases have affected international prices of these commodities, and subsequently the prices of our imported goods,” Popoitai said.
“The increase in prices in Papua New Guinea is due to higher imported prices from our trading partners. In recent months, we have seen high prices of imported items, especially fuel prices, increase significantly.
“However, inflationary pressures from the domestic supply-side normalized attributed to the easing of restrictions of the Covid-19 (Coronavirus) pandemic.
“The annual inflation outcome in the December quarter of 2021 was 5.7 percent as released by the National Statistical Office following an increase of 4.3 percent in the September quarter.”
Acting Governor Popoitai warned that the increased inflation noted in his fourth-quarter report for 2021 reflected higher imported inflation. He said this was being driven by high energy prices that included the cost of crude oil and Covid-19 induced disruptions to supply.
Popoitai said, “The December quarter inflation outcome reflected price increases in education; alcoholic beverages; tobacco and betel nuts; transportation; food and non-alcoholic beverages; health, miscellaneous; housing; and, clothing and footwear expenditure groups of 20 percent, 8.8 percent, 7.7 percent, 6.6 percent, 5.2 percent, 4.3 percent, 2.1 percent, and 1.1 percent, respectively.
“These more than offset declines of 3.5 percent and 2.5 percent in the restaurants and hotels and communication expenditure groups, respectively.”
Image credit Post Courier
