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Papua New Guinea Economic Update, January 2019: Slower Growth, Better Prospects

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dc.contributor.authorWorld Bank Group
dc.date.accessioned2019-02-08T18:04:18Z
dc.date.available2019-02-08T18:04:18Z
dc.date.issued2019-01-31
dc.description.abstractThe PNG economy has become increasingly concentrated in petroleum-and-gas-related activities since 2014, raising its vulnerability to external shocks, including commodity-price shocks and natural disasters. In recent months, however, the authorities have taken decisive action to promote greater diversification of the economy. Ongoing reforms to strengthen the monetary and exchange rate policy and framework are expected to improve business confidence and increase private investment and growth in the non-resource economy. Measures include addressing the FX shortage, managing the liquidity effects of the use of FX to clear the FX orders backlog, working on greater exchange rate flexibility, considering options for strengthening the interest-rate transmission mechanism, and enhancing modeling capacity in the Bank of Papua New Guinea (BPNG). In this context, the government and the BPNG will need to ensure regular, transparent, and consistent communication with all stakeholders to minimize the risk of confusion and market disruption. Papua New Guinea’s medium-term economic outlook is relatively sanguine, underpinned by further large-scale resource projects. Real GDP growth is forecast to rebound to about 5 percent in 2019, primarily driven by a return to full annual production in the extractive sector. In the years after, growth is estimated to ease to its current potential of 3-4 percent a year, until planned investments in LNG and mining projects kick in. Future large-scale investment in the resource sector appears likely, with plans to double LNG production and develop new gold, copper, and silver reserves. With increased FX inflows into the economy, the current pressure on the exchange rate may reverse, adversely affecting the competitiveness of the non-resource economy. To facilitate broad-based, inclusive, and sustainable development, the government will need to focus more on investing in human capital and strengthening the business environment to spur private sector development, as elaborated in the World Bank’s Systematic Country Diagnostic and summarized in the special focus section of this report.en
dc.identifierhttp://documents.worldbank.org/curated/en/597161549016416469/Papua-New-Guinea-Economic-Update-Slower-Growth-Better-Prospects
dc.identifier.doi10.1596/31245
dc.identifier.urihttps://hdl.handle.net/10986/31245
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC OUTLOOK
dc.subjectRISKS
dc.subjectFISCAL TRENDS
dc.subjectMONETARY POLICY
dc.subjectTRADE
dc.subjectPRIVATE SECTOR DEVELOPMENT
dc.subjectJOB CREATION
dc.subjectBUSINESS ENVIRONMENT
dc.subjectINCLUSIVE GROWTH
dc.subjectSHARED PROSPERITY
dc.titlePapua New Guinea Economic Update, January 2019en
dc.title.subtitleSlower Growth, Better Prospectsen
dc.typeReporten
dc.typeRapportfr
dc.typeInformees
dspace.entity.typePublication
okr.crossref.titlePapua New Guinea Economic Update, January 2019
okr.date.disclosure2019-02-01
okr.doctypeEconomic & Sector Work::Economic Updates and Modeling
okr.doctypeEconomic & Sector Work
okr.docurlhttp://documents.worldbank.org/curated/en/597161549016416469/Papua-New-Guinea-Economic-Update-Slower-Growth-Better-Prospects
okr.guid597161549016416469
okr.identifier.doi10.1596/31245
okr.identifier.externaldocumentum090224b0869038c5_1_0
okr.identifier.internaldocumentum30802594
okr.identifier.report134248
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/597161549016416469/pdf/134248-31-1-2019-18-48-46-PNGEUJANfinalfinal.pdfen
okr.region.administrativeEast Asia and Pacific
okr.region.countryPapua New Guinea
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.topicPoverty Reduction::Employment and Shared Growth
okr.topicPrivate Sector Development::Business Environment
okr.topicPrivate Sector Development::Enterprise Development & Reform
okr.unitEast Asia and Pacific 2 (GMTP2)
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