Growth to surpass projections

 By MALUM NALU

THE economy is expected to grow at 6.1%, an upward revision from the 2013 budget estimate of 4%, according to the mid year economic and fiscal outlook (MYEFO) report released yesterday by Treasurer Don Polye.

The report said this upward revision was due largely to an expected rebound in the mining and quarrying sector, the ongoing PNG LNG project construction phase,  and the higher-than-expected stimulus from increased government spending. 

“The fiscal stimulus is expected to boost activity in the non-mining sectors, notably the construction sector, with spending on projects expected to pick up in the latter half of the year,” the report said.

“Small businesses to large entrepreneurs are benefiting from the positive impacts of an economy that is supported by the Government’s fiscal stimulus, the ongoing PNG LNG construction phase and the increasing activities in the mining and petroleum sectors.

“The construction sector is expected to grow at 12.3% in 2013 and this is expected to be driven by the increase in Government spending on infrastructure, as well as continued medium-size construction activities by the private sector. 

“The LNG project’s construction phase, on the other hand, is about to be completed, hence its impact on growth is not as strong as in previous years.”

The report said the community and social services sector was expected to benefit from the increased spending, especially on the Government’s key priorities of education, health and law and justice.

“It is anticipated that this increased spending will have both direct and indirect impact on these key priority areas,” it said.

“The electricity, gas and water sector is also expected to continue to perform strongly in 2013 as a growing economy’s need for power increases. 

“In meeting the additional requirements of the economy, the utility provider of power is increasing generating capacity through additional diesel generators. 

“Growth in other non-mining sectors, including manufacturing, wholesale and retail, transport storage, communication, finance, real estate and business services are expected to moderate in 2013 in line with the LNG construction activities. 

“The agriculture, forestry and fisheries sectors are projected to grow at 2.7%, just below the 2013 budget projection of 2.8%. 

“This growth, while strong, reflects lower commodity prices.”