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Bank of PNG Report Update 2010

In Morobe sales grew by 7.7% in the September quarter of 2009, following an increase of 6.0% in the previous quarter. The growth was driven by the manufacturing, retail, building and construction sectors. In the manufacturing sector the increase reflected a pickup in forestry products and food processing. The increases in the wholesale and retail sectors were due to higher demand stemming from increased activity in mining and construction projects. In the building and construction sector, the increase reflected the ongoing private sector building projects and road maintenance. Over 12 the months to September 2009, sales declined by 8%.

In Lae, the CPI declined by 0.4% in the December quarter of 2009, compared to an increase of 2.9% in the September quarter. Falls of 3% and 0.3% respectively in the ‘Drinks, Tobacco and Betel Nut’ and ‘Household equipment and operation’ expenditure groups, more than offset the increases in other expenditure groups.

Annual headline inflation was 5.7% in the December quarter of 2009, a drop from 11.2% in the December quarter of 2008. The lower inflation mainly reflected the decline in international food and fuel prices, low inflation in PNG’s main trading partners and a fall in the prices of seasonal produce. Annual exclusion-based inflation was 5.0% in the December quarter of 2009, compared to 11.0% in the December quarter of 2008. Annual trimmed mean inflation was 3.8% in the December quarter of 2009 compared to 11.6% in the December quarter of 2008.

Bank of PNG – Quarterly Economic Bulletin – December 2009