World Bank optimistic

PAPUA New Guinea’s growth outlook this year remains positive, according to the World Bank.
However, senior economist Ilyas Sarsenov said the World Bank’s projected gross domestic product (GDP) growth rates were lower than its previous forecast due to delays in finalising agreements and launching major resource projects.
Sarsenov speaking during the PNG economic update presentation in Port Moresby on Friday, said the projection for the next two to three years was lower than previously forecast.
“We expect real GDP to hover around 3 per cent a year on average in 2020 to 2022, which is still a positive outcome for this economy,” he said.
“However, we also identified downside risks for the outlook.
“We already mentioned the domestic development in regards to the delay in agreeing to and implementing large resource projects – Papua LNG and P’nyang.
“However, we also noted that the Government is acting in the best interest of its population by delaying these projects and trying to reap as much benefits from these resource projects for the economy and for the population, especially the most vulnerable who will be benefiting from public service delivery in the future.”
Sarsenov said PNG’s GDP growth surge in 2019, was driven by a rebound in the resources sector (following the February 2018 earthquake).
“This, in turn, has been reflected in sluggish domestic demand, as confirmed by a shortfall in non-resource tax revenue and lower inflation.”
He also mentioned that the report also cited heightened global uncertainty as a reason for the downgrade in growth outlook, including the recent partial trade deal between the United States and China and the emergence of new risks to Chinese and global growth, including the recent coronavirus outbreak.
“The recent tariff cut by China, despite the coronavirus, is a welcome positive signal for the global trade.”