Central Bank issues Inflation Warning!

Posted: January 20, 2008 in Citizenship, Education, Information

The Bank of Papua New Guinea (BPNG) is concerned increasing fuel prices could trigger inflationary pressures in the economy.


Speaking in the bank’s Spetember 2007 quarterly economic bulletin published recently, PNG Governor Wilson Kamit said whole the country’s macroeconomic conditions generally remained favourable the fuel prices increase was a concern.


He added that the Somare government large fiscal surplus and an increase in government-operated trust accounts could also affect the price of basic goods.


What strikes me interesting was that the Governor of Central Bank did not raise any issues when the Somare Government increased funding. Almost everyone was all taking it with much appreciation and no one was concerned.


I remember about the same time, I made a posting ‘Is there too much money in the economy?” to caution the government about the possibility of “Cost-pull” inflation. It too the good Governor at least 4 months to realize the effect of the surplus budget. I think the Governor should wake up and start acting instead of reacting.


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