Opinion & analysis

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Opinion: Using the central bank to finance Papua New Guinea’s deficit is a ‘slippery slope’

29 Oct 2014 by

The Papua New Guinea economy is on the edge of a ‘slippery slope’, if the Bank of PNG finances government debt and continues to fix the exchange rate at too high a rate. Former Australian Treasury advisor Paul Flanagan says compounding the problems are rising inflation, falling foreign exchange reserves, and declining private sector credit growth.

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