“Business and consumer confidence continued to improve during the final quarter of 2022, with anecdotal evidence across a broad section of our retailers and hotel operators experiencing record pre and post-Christmas sales activity”, said BSP Group GM for Corporate Banking, Peter Beswick.
In giving his insight in the 2022 BSP Quarter 4 Pacific Economic and Market Insights Report, Mr. Beswick said, “increased business and leisure travel has seen hotel occupancies reach pre-COVID levels, with many hotel and accommodation facilities near full occupancy.”
Mr. Beswick said for its Corporate Banking Customers BSP is projecting that demand velocity will continue throughout 2023.
“Inflation on the other hand remains the primary concern for BPNG, businesses and consumers,” according to Mr. Beswick.
On 12th December, 2022, BPNG increased the Cash Reserve Requirement to reduce market liquidity, as a further measure to counter imported inflation. On 3rd January, 2023, BPNG signalled a further increase in interest rates, with its third lift in the Kina Facility Rate by 25 basis points to 3.50%. This is likely to dampen investment and consumer spending.
The report also highlighted that strong demand and ongoing supply issues, continue to boost goods’ price inflation. Key inflation drivers remain unchanged with elevated price levels ascribed to supply-chain disruptions, logistics costs and fuel prices.
“Foreign Currency Reserves have hit multi-year highs at USD3.6 billion, delivering strong coverage for Government Foreign Currency loan repayment obligations and BPNG intervention for importers throughout 2023,” Mr. Beswick added.
Back to investor confidence, Mr. Beswick said Papua LNG is a “go”, with Final Investment Decision (FID) expected late 2023 and this will deliver significant opportunities through local content for landowner and PNG companies, direct or through Joint Ventures with global engineering procurement and construction contractors. At end 2022, a number of tender packages were
released to the market in the lead-up to FID. Papua LNG, Government infrastructure projects (Ports & Roads) plus our delayed resource opportunities — Porgera, Wafi-Golpu, Pnyang, and Twinza — are leading multiple customers to build people and resource capacity.
Mr. Beswick concluded that “while there is a shortage of skilled and unskilled labour globally, our customers are focusing on looking after their best people. Retention strategies are now critical.