According to PNG National Budget estimates, the economy will grow by 5.4 per cent in real terms in 2022. This follows a slower 2021, which saw an estimated real GDP growth of about 1.3 to 1.5 per cent.

The Government’s 5.4 per cent growth prediction is underpinned by significant public infrastructure expenditure. There is potential upside from election-related spending, but there’s also risk from new strains or resurgences of Covid resulting from low vaccination levels.

Robin Fleming, the chief executive officer of the BSP group, said, “Despite a challenging 2021, BSP continues to maintain its efforts to meet the evolving financial needs of our customers. We have maintained funding momentum with our successful SME Credit Enhancement Scheme Loan facility, and total loans funded under the scheme now total in excess of K125m with a firm commitment from [the] Government to provide the next tranche of K100m in coming weeks to further support this important sector.”

To support smaller businesses, Mr Fleming added that BSP had reduced loan equity requirements from 30 per cent to 10 per cent. In addition, the maximum loan amount had risen from K3 million to K5 million.

“For Personal Loans, BSP also recently increased the maximum borrowing limit for our unsecured Personal Loan product from K50,000 to K75,000,” Fleming said.

On the topic of the recently introduced Market Concentration Tax Levy, Mr Fleming said BSP had consulted with the Department of Treasury in January, and he looks forward to future meetings.

“Meanwhile, with BSP branches across the Pacific, border restrictions have adversely affected GDP growth and increased public debt in tourism-dependent economies. Resuming travel, safeguarding health, promoting fiscal sustainability, and strengthening economic management is key to developing a resilient Pacific,” Mr Fleming added.

“Further, increasing international travel and commodity prices in 2022 bode well for economies in the Pacific region. However, the pandemic and its variants loom large over economic forecasts in the Pacific.”