PAPUA New Guinea’s finance sector has recorded strong growth over the past three years, with real growth rates averaging six per cent, according to Treasurer Ian Ling-Stuckey.
Speaking after a recent meeting with industry leaders, Ling-Stuckey said the finance sector had become a major contributor to the economy, surpassing the manufacturing sector in size.
“The finance sector has grown strongly over the last three years, with real growth rates averaging six per cent,” he said.
Ling-Stuckey noted that banks had reported record profits while superannuation funds delivered record distributions to members and shareholders.
He also highlighted improvements in the country’s foreign exchange situation, with clearance times now averaging less than a few days.
However, Ling-Stuckey said concerns were raised about the rapid increase in offshore investments by superannuation funds, which have grown from around 12 per cent of portfolios to between 23 and 25 per cent in the past two years.
While current regulations allow up to 35 per cent of superannuation assets to be invested overseas, the Government would continue monitoring capital outflows due to their impact on the Kina and domestic investment opportunities.
The meeting also discussed reforms aimed at strengthening financial markets, including the development of a secondary market for government securities and expanding inter-bank trading to improve market liquidity.
Ling-Stuckey said further consultation would be undertaken on proposed tax reforms, including new laws to strengthen information-sharing and combat money laundering and tax avoidance.
