Modest economic growth predicted

ECONOMIST Paul Barker has projected modest economic growth but lacking any strong externally driven or domestic stimulus for Papua New Guinea (PNG) next year.
“Substantial investment will be lacking or there will not be any heightened economic activity,” he added.
Barker, who is Institute of National Affairs executive director, said: “The prospects of a series of major new resource-based investments, starting with Papua LNG, maybe will go ahead in late 2023, and of course the long overdue restoration of the Porgera mine, will certainly boost business confidence, as well as stimulating capital inflows and some foreign exchange.
“It is critically important that the Government avoids the mistakes of the early 1990s and repeated in the early 2010s, imagining major new resource projects fixing the country’s economic and fiscal needs.
“That fuelled premature public expenditure and deficits, well before revenue was received but also potentially undermining the prospects for critical diversification of the economy. “The country has suffered over the years from what used to be called a dual-economy, but has subsequently been termed the resource curse, whereby the domination of the resource sector, in terms of formal sector economic impact, ended up restraining the development of the rest of the formal economy and even the informal economy.
“The informal economy provides most of the employment and broad-based economic opportunities nationwide, if not the export earnings or necessarily the revenue.”