Rugby League is a national obsession in Papua New Guinea and the award of a team franchise to compete in Australia’s NRL from 2028 will come as a major economic boost for the country, as well as helping to deepen its ties with Australia, says Westpac Senior Economist Justin Smirk, fresh off the back of his visit to PNG.
The Hunters NRL team was a major topic of conversation among delegates at the CEO100 business summit in the capital Port Moresby in March, contributing to a broader sense of optimism towards the PNG economy.
Strong commodities prices underpinned robust GDP growth of 4.3 per cent in 2024 and we see the momentum continuing into 2025, forecasting a further pick up to 4.7 per cent.
That PNG was able to achieve this in the face of some meaningful headwinds is remarkable. As outlined in the latest Westpac Business Advantage PNG CEO100 Survey, these headwinds include a significant lack of foreign exchange, security law and order issues, unreliable utilities, a lack of government capacity, regulatory uncertainty, and a shortage of skills and expertise.
The restart of the Porgera gold mine in late 2023, after being shuttered since 2020 over a dispute between the government and operator Barrick Gold, has been timely with bullion prices surging more than 30 per cent in the past twelve months.
PNG has also enjoyed strong export earnings from its coffee and cocoa production after weather-related disruptions in other key growing areas round the world led to a spike up in prices.
We expect other parts of the economy such as services and domestic industries to make more of a contribution in the year ahead, while the outlook also looks more promising for PNG’s other key resources exports: liquefied natural gas and nickel.
While growth is chugging along nicely, inflation is high in PNG and remains a risk to the outlook. The central bank increased interest rates by a full percentage point to 4 per cent back in September to keep a lid on price pressures, and we can’t rule out further policy tightening.
Like every other trade-reliant nation, PNG is also vulnerable to the potential impact on the global economy from President Trump’s protectionist policy agenda.
PNG is unlikely to see much direct impact from Trump’s trade tariffs due to its minimal trade exposure to the U.S., but we remain vigilant about their effects on some of PNG’s key trading partners.
There is also the potential for further improvements to mitigate some of the headwinds outlined in the CEO100 Survey which would make a significant difference to potential growth rates.
Deeper ties
The Hunters NRL team will start out life from this relatively strong economic backdrop and can offer further impetus for growth.
It’s a nation-building project that will require significant investment in stadium upgrades and training facilities, as well as transport and tourism infrastructure.
It will create a host of job opportunities, from training and support staff with the team itself to local businesses expanding their workforce to meet rising demand around game days. On a broader level, the tourism industry will look to capitalise on a higher profile for PNG in its biggest target market, Australia.
Beyond the economic benefit, PNG’s entry into the NRL will help to deepen cultural ties between the two countries, potentially opening up further avenues for cooperation and collaboration.
