Sector set to recover

 Growth in Papua New Guinea’s non-mining economy is expected to recover to around four per cent this year, the World Bank says.

The projected recovery was mainly attributable to a rebound in construction of the 2015 Pacific Games facilities and the ongoing upgrading of roads.

The bank projected that the country’s economy would grow by 16 per cent this year, with the majority of this growth attributable to the ramping up of PNG LNG project exports in the short term.

In one of its publication, Economic Update East Asia and Pacific Region, the World Bank said in the long term, the revenue from the project’s exports would be subjected to risks from oil price fluctuations.

The bank advised that focusing on the quality of public spending would be important in the coming years as growth in capital spending appeared to have squeezed recurrent expenditures in some cases.

Meanwhile, the pending operationalisation of the Sovereign Wealth Fund (SWF) would be particularly important in the period ahead, given expectations among the population that benefits flowing from the extraction of the country’s natural resources would be more broadly distributed. 

It was further noted that the impact of Papua New Guinea LNG and other resource projects on living standards across the country would be determined largely by how well the revenues flowing from these projects were managed and spent.