PNG budget blowout from bad to worse

8:35 pm on 2 August 2017

An Australian economist says the latest financial information from Papua New Guinea shows the economy is being extraordinarily mismanaged.

Paul Flanagan has long taken an interest in PNG's economy and said the fiscal outlook released at the beginning of this week showed mismanagement of the budget was worst than previously thought.

Port Moresby

Port Moresby Photo: RNZI/Johnny Blades

He said the Peter O'Neill government had already run the biggest budget deficits in PNG's history over the past five years and this had climbed further in the seven months since the last budget.

"The budget has blown out by more than a billion kina [$US309 million], spread evenly between falls in revenue as well as expenditure being higher than expected. The public debt has blown out from 21 billion kina [$US6.5 billion] to 25 billion [$US7.7 billion] or 29 percent of GDP to 34.5 percent. That is an extraordinary turn around in the explosion of public debt levels, all within the last seven months," said Paul Flanagan.

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