Papua New Guinea Economy - 2006

Economy - overview:
Papua New Guinea is richly endowed with natural resources, but exploitation has been hampered by rugged terrain and the high cost of developing infrastructure. Agriculture provides a subsistence livelihood for 85% of the population. Mineral deposits, including oil, copper, and gold, account for nearly two-thirds of export earnings. The economy has improved over the past three years because of high commodity prices following a prolonged period of instability. The government of Prime Minister SOMARE has expended much of its energy remaining in power and should be the first government in decades to serve a full five-year term. The government has also brought stability to the national budget thus far, largely through expenditure control. Numerous challenges still face the government including regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and balancing relations with Australia, the former colonial ruler. Other socio-cultural challenges include the HIV/Aids epidemic, law and order, and land tenure issues. Australia annually supplies $240 million in aid, which accounts for nearly 20% of the national budget.

GDP (purchasing power parity):
$13.35 billion (2005 est.)

GDP (official exchange rate):
$4.096 billion (2005 est.)

GDP - real growth rate:
1.1% (2005 est.)

GDP - per capita (PPP):
$2,400 (2005 est.)

GDP - composition by sector:
agriculture: 35.2%
industry: 38.3%
services: 26.4% (2005 est.)

Labor force:
3.4 million (2005 est.)

Labor force - by occupation:
agriculture: 85%
industry: NA%
services: NA%

Unemployment rate:
up to 80% in urban areas (2005)

Population below poverty line:
37% (2002 est.)

Household income or consumption by percentage share:
lowest 10%: 1.7%
highest 10%: 40.5% (1996)

Distribution of family income - Gini index:
50.9 (1996)

Inflation rate (consumer prices):
1.7% (2005 est.)

Investment (gross fixed):
20.4% of GDP (2005 est.)

Budget:
revenues: $1.368 billion
expenditures: $1.354 billion; including capital expenditures of $344 million (2005 est.)

Public debt:
47.1% of GDP (2005 est.)

Agriculture - products:
coffee, cocoa, copra, palm kernels, tea, sugar, rubber, sweet potatoes, fruit, vegetables, vanilla; shell fish, poultry, pork

Industries:
copra crushing, palm oil processing, plywood production, wood chip production; mining of gold, silver, and copper; crude oil production, petroleum refining; construction, tourism

Industrial production growth rate:
NA%

Electricity - production:
1.592 billion kWh (2003)

Electricity - consumption:
1.481 billion kWh (2003)

Electricity - exports:
0 kWh (2003)

Electricity - imports:
0 kWh (2003)

Oil - production:
50,000 bbl/day (January 2006 est.)

Oil - consumption:
18,000 bbl/day (January 2006 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Oil - proved reserves:
170 million bbl (2005 est.)

Natural gas - production:
140 million cu m (2003 est.)

Natural gas - consumption:
140 million cu m (2003 est.)

Natural gas - exports:
0 cu m (2001 est.)

Natural gas - imports:
0 cu m (2001 est.)

Natural gas - proved reserves:
345.5 billion cu m (2005)

Current account balance:
$113 million (2005 est.)

Exports:
$2.833 billion f.o.b. (2005 est.)

Exports - commodities:
oil, gold, copper ore, logs, palm oil, coffee, cocoa, crayfish, prawns

Exports - partners:
Australia 28%, Japan 5.8%, Germany 4.7%, China 4.6% (2004)

Imports:
$1.651 billion f.o.b. (2005 est.)

Imports - commodities:
machinery and transport equipment, manufactured goods, food, fuels, chemicals

Imports - partners:
Australia 46.4%, Singapore 21.6%, Japan 4.3%, NZ 4.2% (2004)

Reserves of foreign exchange and gold:
$663 million (2005 est.)

Debt - external:
$1.978 billion (2005 est.)

Economic aid - recipient:
$NA

Currency (code):
kina (PGK)

Exchange rates:
kina per US dollar - 3.08 (2005), 3.2225 (2004), 3.5635 (2003), 3.8952 (2002), 3.3887 (2001)