Growth is forecast at 6.0% in 2014 and a record 21.0% in 2015, led by the commencement of gas exports in late 2014. In contrast with mining and petroleum, the rest of the economy will grow by just 1.6% in 2014. A challenge for the government is to share the benefits of growth and to narrow regional inequality by expanding services in rural areas and employment through a more conducive business environment.
Economic growth in Papua New Guinea (PNG) slowed to 5.1% in 2013 as construction on a $20 billion liquefied natural gas (LNG) project wound down toward completion in mid-2014. Growth in construction halved from 24% in 2012 to 12% in 2013, and this deceleration spilled over into the broader economy, slowing growth in wholesale and retail trade from 20% in 2012 to 5% in 2013. Long-term declines continued at a number of older mining and oil operations, but they were more than offset by increased output from a new nickel project, such that mining and quarrying as a whole expanded by 15% in 2013.
|Selected Economic Indicators (%) - Papua New Guinea||2014||2015|
|Current Account Balance (share of GDP)||-7.0||13.0|
Source: ADB estimates.
Growth in gross domestic product (GDP) is forecast at 6.0% in 2014, picking up to a record 21.0% in the following year although ongoing challenges with the quality of macroeconomic data continue to limit the accuracy of these forecasts. Leading this growth is oil and gas, as LNG production is expected to commence in late 2014, making 2015 the first full year of production. The rebound in mining and quarrying is expected to continue as new operations further expand production, boosting real growth in that sector to 14.0% in 2014 before it falls back to 3.1% in 2015.
In contrast with mining and petroleum extraction, activity in the rest of the economy is expected to continue to slow, with growth forecast at just 1.6% in 2014.
Source: ADB. 2014. Asian Development Outlook 2014. Manila.