Photo credit: Asian Development Bank
According to the Asian Development Bank, Papua New Guinea's economy will remain difficult in the short term until some resource projects begin (ADB).
Edward Faber, a country economist with the Asian Development Bank in PNG, said the country was presently dealing with a variety of challenges, including the impact of the Coronavirus (Covid-19) epidemic, a foreign exchange deficit, and national elections next year.
He recently spoke at a symposium in Port Moresby on EU-PNG business, trade, and investment.
According to Faber, PNG's economy would be worth around US$23.7 billion (K81 billion) in 2020, with the mining sector accounting for a quarter of the total, helping to fuel considerable growth across the board.
“In 2020, the growth forecasts had been to be about two per cent pre-Covid-19, so that was still seen to be relatively subdued and weak,” Faber said.
“There’s no major investment, no major mega projects generating growth and also a number of impediments including foreign exchange shortages and infrastructure.
“With the Covid-19 pandemic effects, growth was then revised between negative three to four per cent.
“So as we take a closure look at 2020 then, the major sectors to show contraction were accommodation and food services, transport and stage, trade, construction and elsewhere.
“These sectors being specifically impacted by the lockdowns, restriction to movement of people and goods and weaker international demand for Papua New Guinea's exports and difficulties with having imports.”
The mining industry, according to Faber, was the most affected by the shutdown of the Porgera mine, while the Ok Tedi mine was shut down for roughly six weeks and the Lihir mine reported lower output.
Bright spots, said Faber, include the planned reopening of the Porgera gold mine and other big initiatives in the works, such as fiscal changes.
Reference: Luma, Dale. The National (12 October 2021). “Economy needs projects: Bank”.
