PNG Macro Environment
KFM maintain our view that medium term economic growth will be slow, as government infrastructure spending fails to compensate for falling private sector demand and investment. Sluggish local demand, completion of the construction phase of the PNG LNG project and inefficiencies in implementing government spending programs will all contribute to reduced economic activity. We believe inflation will increase over 2014 towards 5% – 6%, in particular following the 2013 devaluation of the PNG Kina.
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