Economically, PNG’s overall economic growth performance has been consistent with real GDP per capita averaging 3 percent since the mid-2000s. While revenues continue to face challenges arising from lower global commodity prices, good macroeconomic management and well calibrated service delivery is necessary to ensure development benefits are accessed by a greater number of citizens into the future.
Papua New Guinea’s population of 8 million is young and growing. PNG’s growth trajectory and abundant resource potential provides a strong platform for economic engagement with Asia and further abroad.
The country’s economy remains dominated by two sectors:
- the agricultural, forestry, and fishing sector, which engages most of the labor force (the majority informally);
- the minerals and energy extraction sector which accounts for the majority of export earnings and Gross Domestic Product.
To diversify PNG’s asset base and increase employment, investment is needed to strengthen capacity in institutions, human capital, and physical infrastructure. Electricity, telecommunications, road and other transport infrastructure remain critical to enabling private sector-led growth.
Obtaining more revenue from the mineral and petroleum sector by discontinuing the practice of providing significant tax concessions to companies operating in this sector will improve both the fiscal balance and the foreign exchange position in PNG. Further, translating revenues into strong, tangible improvements in living standards for all Papua New Guineans remains the key challenge for the Government of PNG, yet other challenges are also immense. It is important to improve public financial management and efficiency of public spending to convert resource revenues into inclusive growth and, consequently, a genuine improvement in the livelihoods.
Last Updated: Apr 02, 2018