The economy of the country will have steady growth this year.
According to Senior economist Ilyas Sarsenov of the World Bank, it was predicted to be nine per cent smaller in 2023 compared with pre-pandemic.
“Like in the rest of the world, the pandemic’s shock was expected to lead to a long period of below-trend economic growth in Papua New Guinea, “ he said. “This outlook reflects both delays to forthcoming resource projects and some level of ‘scarring’ caused by pandemic-related disruptions, whereby the consequences of higher unemployment, falling incomes, and reduced economic activity impact future consumer spending and business investment. The outlook is expected to follow a shallow ‘U-shaped’ recovery instead of a more rapid ‘V-shaped’ bounce back. These forecasts are subject to a high level of uncertainty. They will depend on the speed of both domestic and international vaccine rollouts, future levels of demand for Papua New Guinea’s exports, and Government efforts to improve economic and fiscal resilience to external shocks.”
The World Bank PNG economic update said that developments in the external sector would be dictated by the health and economic implications of the Covid-19 pandemic.
“Export receipts from commodities will determine the external financing requirement, level of international reserves, and exchange rate developments,” he said. “Sluggish global economic conditions owing to the second wave of the pandemic and associated lockdown measures are likely to keep commodity prices down, leading to large losses of export earnings for Papua New Guinea. On a positive note, commodity prices for Papua New Guinea’s exports recovered in the third quarter of 2020 in response to an acceleration of industrial activity globally, particularly in China.”
