Global, local performance lift PNG economy

An increase in global commodity prices and production in the domestic mining industry, coupled with improved performance in the non-extractive sector, helped Papua New Guinea record modest growth in 2017, according to a report.
Oxford Business Group in its 2017 Yearly Review highlighted that PNG’s economy grew by an estimated 2.2 per cent last year, according to the 2018 Budget tabled in Parliament on Nov 28.
While above the 2 per cent annual growth rate recorded in 2016, the figure was below the 2.7 per cent expansion forecast in the Treasury’s Mid-Year Economic and Fiscal Outlook, released at the end of June.
The decline from earlier predictions was partly attributed to a slowdown in hydrocarbons, PNG’s largest sector in terms of real GDP, which posted negative growth of 2.2 per cent in 2017 on the back of a drop in oil field production.
However, these losses were partially offset by growth in other key areas: Mining and quarrying was the best-performing sector of the year, expanding by 13.6 per cent on the back of increased gold, nickel and cobalt production, and a recovery in commodity prices.
Manufacturing, and agriculture, fisheries and forestry also expanded – by 3 per cent and 2.6 per cent, respectively.
While the increase in mining activity drove expansion last year, 2017 also saw key developments in the country’s non-extraction sector.
Full-year, non-mineral GDP rose by 1.9 per cent overall, up from 0.7 per cent in 2016.
Overall GDP is estimated to increase by 2.4 per cent in 2018, before moderating to 2.2 per cent and 2 per cent in 2019 and 2020, respectively.