World Bank predicts 3pc growth

By CLARISSA MOI
THE country’s gross domestic product (GDP) growth is expected to hover around three per cent this year, according to World Bank senior economist for PNG Ilyas Sarsenov.
Presenting the World Bank’s outlook for PNG for 2020, he said this included downside risks such as unexpected external shocks or potential domestic political and economic turbulences.
“Real GDP growth bounced back from minus 0.8 percent in 2018 to over five percent in 2019, with a rebound in the resource sector mainly in its extractive segment, earlier affected by an earthquake making slower growth of the non-resource economy,” he said.
“The latter was due to sluggish domestic demand as confirmed by a shortfall in non-resource tax revenues and lower inflation, while formal employment improved during the first nine months of 2019.
“Growth outlook remains positive, but projected GDP growth rates are lower than our previous forecast, mainly due to delays in finalising agreements and launching implementation of large new resource projects.”
Sarsenov said the other major factor was the tension between the United States and China, with a negative impact on global growth and potentially weaker external demand for commodities produced by PNG.
“A growing oversupply in the global liquefied natural gas market may also influence revenues in the extractive sector, with some negative implications for the non-resource economy.”
According to the World Bank’s January 2020 Global Economic Prospects released last week, global economic growth is forecast to edge up to 2.5 per cent this year as investment and trade gradually recover from last year’s significant weakness but downward risks persist.
“Growth among advanced economies as a group is anticipated to slip to 1.4 per cent in 2020 in part due to continued softness in manufacturing.”