State of PNG Economy-Start of 2019
The global economy experienced sustained growth during most of 2018, led by the US but also with continued Chinese progress, despite growing uncertainty over China’s level of debt and the stability of its property market and increasing market nervousness at the year end. Most commodities saw some recovery during the early part of 2018, although as the year progressed increased threats of trade war between the US and China, but also between US and its traditional allies and trading partners and divergent fiscal and monetary policy in the US, sent stocks and some commodity markets tumbling or into uncertain fluctuations, while gold prices soared to USD 1,271/oz as a safe haven.. China’s increasingly forthright stance over some regional issues, and tough stance with respects to domestic issues and some minority groups, added to concerns that it was no longer business as usual. China’s effort to have its growth stimulated by overseas investment and lending is logical, considering the level of apparent over-capitalisation at home, but anxiety over increasing economic dominance and indebtedness from easy loans have invariably generated tensions amongst regional neighbours in S/SE Asia and the Pacific. Some of these tensions came to the fore during the APEC Leaders’ Summit hosted by PNG in November, with some unseemly interventions over the wording of texts, and some competitive inducements, perhaps providing opportunities but also risks for Pacific islands nations over infrastructure and other services.
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