Members of the Papua New Guinea government, including Treasurer Patrick Pruaitch (centre) and Prime Minister Peter O'Neill (right) Photo: RNZ / Johnny Blades
Papua New Guinea's government is planning significant cuts to the national budget as a volatile global economy and plunging oil and gas prices take their toll on forecast government revenues.
The Treasury minister, Patrick Pruaitch, says the government plans to cut 463 million US dollars from expenditure this year, and is considering further measures to ensure the deficit will be lower than that projected in the Treasury's Mid-Year Economic and Fiscal Outlook.
Mr Pruaitch says the government's fiscal strategy has been endorsed by the International Monetary Fund, which concluded that large spending cuts were needed to keep public debt at a sustainable level.
The IMF says a comprehensive policy response to reduced commodity prices and the temporary suspension of mining at Ok Tedi had substantially lowered Government revenue prospects to the point where it was no longer feasible to aim for a balanced budget in 2017.
He told the Post Courier that taking prudent action now will safeguard PNG's economic performance in the next few years when key commodity exports are expected to remain low.
