2 Nov 2002

PNG currency decline expected to affect cost of living

8:36 am on 2 November 2002

The cost of living in Papua New Guinea is expected to skyrocket as the local currency, the kina, continues to plunge.

The PNG Chamber of Commerce has expressed concern at the substantial decline of the kina as it dipped to just under 20 US cents at one stage this week.

The Chamber president, Michael Mayberry, says the downward spiral of the kina was likely to trigger a sharp rise in the cost of food and an increase in the cost of living.

Mr Mayberry says a number of business houses were shutting down because bank drafts have become useless and their ordered imported stock may have to go back on return shipments.

He says expatriates have left already and companies are closing, meaning the loss of jobs which PNG can ill-afford.

Mr Mayberry says when expatriates leave so do jobs because well-to-do PNG nationals tend to invest their earnings overseas.

He says shipping difficulties, the oil field closures, declining exports, the worsening state of the Highlands Highway and threats against the World Bank had all contributed to the weakening kina.