The National Government is monitoring the potential impact on global prices and domestic economy due to the conflict involving Iran, Israel and the United States.
The Government recognizes that rising global prices could lead to imported inflation, especially in fuel and essential goods that PNG relies on from overseas.
Prime Minister James Marape said that global oil markets remained vulnerable, noting that any disruptions to key international shipping routes through which an estimated 20-30 per cent of the world’s oil supply passes could place upward pressure on fuel prices worldwide.
“We are watching this situation very closely,” Mr Marape said.
“If fuel and food prices rise sharply due to imported inflation, the Government will intervene to assist the economy and protect our people.”
The Prime Minister confirmed that the Government was ready to provide targeted subsidies particularly on fuel, should verified inflationary pressures threaten affordability or broader economic stability.
He added that the Government has proven experience in managing external economic shocks, pointing to interventions implemented during the COVID-19 period.
“In times like this, I strongly encourage Papua New Guineans to buy from local producers,” Mr Marape said.
“We have enough food in our country, we do not need to be pressured into consuming imported food as our primary staple.”
PM Marape assured the nation that should the global conflict escalate further and inflationary pressure increased, the Government would implement additional measures to help the country navigate what he describes as a potentially stressful global economic phase.