WB sees minimal growth this year

 By SHIRLEY MAULUDU

THE growth of the country’s non-resource sector will slow further this year before returning to its underlying trend growth rates next year, World Bank PNG economist Tim Bulman said.

Bulman said: “We think the economy grew by around 4- 4.5% in 2013.” 

“Taking out the impact of the start of PNG LNG production and other resource extraction, we expect minimal growth in the economy in 2014, largely because of the subtraction from the construction and associated industries as the works for the PNG LNG and other projects concluded.”

Bulman said outlook for agriculture was also subdued given the structural issues for many cash crops. 

For next year, he said it depended on whether the government would make efforts to improve the investment climate and make PNG a more attractive place for local and international businesses to invest.

“This means reducing the high cost of operating in PNG due to poor competition in many sectors, lack of infrastructure, the problems caused by poor law and order climate or the difficulties in enforcing contracts and securing property rights.”

Institute of National Affairs (INA) director Paul Barker said low growth in non-mining sector this year suggested a very low growth rate in the rest of the economy.

“With continued low commodity prices and diseases in agriculture (with the suffering cocoa industry) and perhaps even the growth in building and construction of recent years tailing off a bit”.

Barker, who is an economist, said impact on agriculture, manufacturing and tourism would only be positive if the negative impacts (of Dutch disease) were restrained.