Economic growth predicted

THE country’s economy is expected to recover this year with growth forecasted for both the mineral and non-mineral sectors, according to the Bank of Papua New Guinea.
However, concerns remain given the heightened risk of the Covid-19 pandemic with the rising numbers of infections as well as the impact of any further tightening containment measures.
According to the Central Bank’s monetary policy statement released yesterday, a rollout of vaccinations would assist with the economic recovery process.
Governor Loi Bakani said the global economy contracted by 3.5 per cent last year according to the International Monetary Fund (IMF) world economic outlook update published in January.
“This was the largest decline since the 1930s Great Depression and was largely due to the Covid-19 pandemic,” he said. “For 2021, the IMF forecasts a recovery of 5.5 per cent, on the back of the rollout of the Covid-19 vaccines, combined with additional fiscal stimulus packages and accommodative monetary policies.
“In PNG, the economic activity was estimated by the Bank of PNG to have contracted by around three per cent last year. This was mainly due to the state of emergency measures.”
“The sectors hardest hit were the transportation, accommodation (hotels), food services and other related services.
“The closure of the Porgera gold mine last April also impacted adversely on economic activity.”
Bakani said the bank had projected gross domestic product growth for the country to recover this year, to around 2.5 per cent with high activity in the agriculture, fisheries, forestry and the mineral sectors as well as other businesses.