Papua New Guinea's government and Central Bank say there is no need to panic about the state of economy.
Reassurances have been given by the Bank of PNG governor Loi Bakani this morning in Cairns at the Australia/Papua New Guinea Business Forum.
The annual business meet comes as reports from PNG indicate deepening foreign exchange woes and signs that the government could be preparing to make more cuts to cope with ballooning debt.
While acknowledging the foreign exchange shortage, Mr Bakani said the Bank and the government are seeking foreign currency facilities from external sources, and that expected resource sector inflows should soon turn the situation around.
PNG's Minister of Petroleum and Energy, Ben Micah, said that the government was taking measures within its means to manage the current economic difficulties.
"Papua New Guinea, contrary to what doomsdayers are saying, is not about to sink or is not about to go bankrupt tomorrow," said Mr Micah.
"All the issues of shortage of foreign reserves in the banking system and issues that are affecting our economy - because of the drop in oil prices and the not very bullish price of minerals - are only temporary things, issues that are cyclical. And we will bounce back at the appropriate time."
Ben Micah said PNG had very large reserves of natural gas and minerals as well as abundant fishery and agriculture resources which, combined with its strategic location, stood its economy in good stead for the future.
Speaking at the Cairns event on the fiscal difficulties facing PNG, Mr Bakani blamed social media for spreading misinformation about the economy.
"Medium to long term prospects and outlook for PNG economy are positive and strong," read Mr Bakani's powerpoint presentation on the PNG Economic Summary.
The Central Bank governor said that foreign reserves at present were $US1.7billion or 10 months total import cover.
However PNG Today reported that the country's foreign exchange situation was so bad that the Bank of PNG had been rationing foreign currency by limiting how much people could send out, and that many foreign suppliers were waiting to be paid for goods they had sold to PNG-based importers.
Furthermore, the Central Bank's efforts to borrow foreign currency from the International Finance Corporation were understood to have been unsuccessful.
LNG Project facility, Central Province, Papua New Guinea. Photo: RNZI / Johnny Blades
