1 week Ago By Dale Luma
THE Bank of Papua New Guinea (BPNG) will monitor the impacts of the US trade policy changes and hike in tariffs, says Governor Elizabeth Genia. Ms Genia said during the announcement of BPNG’s 2025 economic outlook that the question has to be asked on how the recent tariff announcement will affect PNG. However, she said the real question should be how the tariffs impact globally and the likelihood of a global recession.
“The question has to be asked, how will the recent tariffs introduced by the US impact Papua New Guinea?” she said. “The real question is, how will the tariffs impact globally? And what is the likelihood of a global recession? For answers, we need to look at the two most recent significant global events, COVID-19 and the GFC in 2008 and 2009. “Papua New Guinea emerged relatively unscathed from the GFC, largely insulated from the global banking condition, due to the absence of any exposure to leveraged credit or subprime mortgage-backed securities.
“However, the COVID-19 pandemic and subsequent outbreak of the Russian-Ukraine conflict presented a different challenge. “These events led to sharp increases in global energy prices, triggering significant inflation and directly impacting Papua New Guinea’s economy. “If equity markets continue to sell off and we see increased margin calls, we could see vulnerabilities emerge in global banking.
“And while we should be largely insulated from that, as we were in 2008, the impact of such an event on funding for PNGL, Papua LNG, is an unknown. “Regarding the tariffs themselves, any impact on LNG prices is likely to be limited. “Given that most of the PNG’s LNG is contracted forward and with gold prices currently above US$3000 per ounce, we may see heightened interest in PNG’s gold deposits.
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