PNG Macro Environment
Considering the price assumptions made in the 2016 Budget in comparison to the current market which is still lower then the budget. KFM believes that GDP growth will be lower than the budget forcast of 4.3% largely due to the impact of decline in global commodity markets and affected key market sectors such as agriculture, energy, mining and resources. National Statistics Office announced the CPI update for December quarter was 1.9% putting 2015 inflation at 6.4%. KFM believes inflation will increase over the next six months largely driven by the Kina’s continuing downward momentum against the USD.
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