The next six months is a ‘highly vulnerable period’, according to the latest market outlook from Papua New Guinea finance company and stockbroker, Kina Securities Ltd.

PNG’s real GDP growth will slow to 4% this year from 9.2% last financial year, the report said. The winding down of the PNG LNG project’s construction phase, falling commodity prices and Woodside’s shelving of the Browse LNG project emphasised the uncertainty in the market.

Kina analysts also expect delays to the Frieda River and Wafi mines, after Newcrest Mining specifically mentioned its high cost gold mines, including Hidden Valley, were being reviewed.

Inflation will move back up to 5% or more, according to the report, while Papua New Guinea’s currency will weaken.

‘We expect the Kina to weaken further this year against the US dollar, although the cut in the RBA [Reserve Bank of Australia] Cash Rate may put a temporary halt of the Kina depreciation against the Australian dollar.’

Kina’s market outlook predicts the government’s deficit will exceed the original Budget projection of K2.5 billion (US$1.13 billion), putting pressure on interest rates.