Positive economic outlook seen

The National Business

The PNG Chamber of Mines and Petroleum has welcomed the 2018 World Bank East Asia and Pacific Economic Update which has forecast a positive economic outlook for the country.
The chamber also acknowledged the contribution large-scale resource projects would have in the coming years. After a rebound in economic growth last year, the World Bank predicts the gross domestic product (GDP) will decline in 2018 following the devastation of the earthquake which hit the country in February this year.
The economic update warns that global trade and global GDP growth are also slowing, which poses risks for a region heavily dependent on trade.
The update also predicts a period of global uncertainty caused by rising protectionist sentiment and increasing turbulence in the financial markets. During his visit to Port Moresby for Apec meetings, Sudhir Shetty, World Bank chief economist for East Asia and Pacific, urged policy makers to prepare for this uncertainty by:

  • Enhancing resilience and preparedness;
  • Strengthening macroprudential policies; and,
  • Using fiscal policy – including exchange rate flexibility to establish buffers against potential shocks.

In the face of these challenges, the report notes that the resources sector is well positioned to fortify the PNG economy.
Growth in GDP is expected to rebound to 3.5 per cent next year and 3.1 per cent in 2020, primarily due to a return to full production in the resource sector, LNG and gold extraction. Resource-specific GDP growth is predicted to rise to 8.3 per cent in 2019, the highest rate since 2016.
PNG Chamber of Mines and Petroleum executive director Dr Albert Mellam says mining and petroleum industry are important contributors to a resilient PNG economy.
“Along with contributing to government revenue through taxes and royalties, the resources sector is helping create a strong broad-based economy by investing in education programmes, creating jobs and ensuring rural communities have access to power, roads and health services,” he said.
“This creates opportunities for small businesses, manufacturers and farmers to access new markets and grow their operations which means more jobs, more government tax revenue and more resilience for the PNG economy.”