World Bank sees chance for GDP to rebound

Business

By CLARISSA MOI
Real gross domestic product (GDP) growth in Papua New Guinea is forecast to rebound to 5.1 per cent this year, according to World Bank Group.
This is primarily driven by an expected return to full annual production in the extractives sector.
Country manager Patricia Veevers-Carter said during the World Bank PNG Economic Update in Port Moresby yesterday that PNG had dealt with numerous challenges over the past year. “Not least, the earthquake last February that had a devastating impact on so many lives and the economy,” she said.
“To reduce the vulnerability of the economy to natural disasters and commodity price shocks, the Government should continue to facilitate broad-based, inclusive and sustainable development by focusing on building PNG’s human capital through quality education and health investments, and strengthening the business environment to drive increased private sector development.”
According to a report released by World Bank yesterday, preliminary estimates suggested that real GDP growth slowed from 2.8 per cent in 2017 to 0.3 per cent last year following a contraction in the extractive sector due to the earthquake.
“This stands in contrast with the growth of 2.5 per cent for 2018 made prior to the earthquake,” it said.
“Non-extractive sector activity is expected to continue expanding, with better investor confidence supported by improved access to foreign exchange.
“In the coming years, growth is estimated to hover at about three to four per cent per year, until planned investments in new gas and mining projects kick in and improve PNG’s growth potential.”
Country economist Ilyas Sarsenov said setting the non-resource sector on a more-robust trajectory would be essential to creating enough good jobs to absorb the large number of young jobseekers entering the labour force in the coming decades, particularly in agriculture, fisheries and tourism.