Papua New Guinea Economy - 2022

Economic overview

Papua New Guinea (PNG) is richly endowed with natural resources, but exploitation has been hampered by rugged terrain, land tenure issues, and the high cost of developing infrastructure. The economy has a small formal sector, focused mainly on the export of those natural resources, and an informal sector, employing the majority of the population. Agriculture provides a subsistence livelihood for 85% of the people. The global financial crisis had little impact because of continued foreign demand for PNG's commodities.

Mineral deposits, including copper, gold, and oil, account for nearly two-thirds of export earnings. Natural gas reserves amount to an estimated 155 billion cubic meters. Following construction of a $19 billion liquefied natural gas (LNG) project, PNG LNG, a consortium led by ExxonMobil, began exporting liquefied natural gas to Asian markets in May 2014. The project was delivered on time and only slightly above budget. The success of the project has encouraged other companies to look at similar LNG projects. French supermajor Total is hopes to begin construction on the Papua LNG project by 2020. Due to lower global commodity prices, resource revenues of all types have fallen dramatically. PNG’s government has recently been forced to adjust spending levels downward.

Numerous challenges still face the government of Peter O'NEILL, including providing physical security for foreign investors, regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and maintaining good relations with Australia, its former colonial ruler. Other socio-cultural challenges could upend the economy including chronic law and order and land tenure issues. In August, 2017, PNG launched its first-ever national trade policy, PNG Trade Policy 2017-2032. The policy goal is to maximize trade and investment by increasing exports, to reduce imports, and to increase foreign direct investment (FDI).

Real GDP (purchasing power parity)

$36.69 billion (2020 est.)

$38.17 billion (2019 est.)

$36.06 billion (2018 est.)

note: data are in 2017 dollars

Real GDP growth rate

2.5% (2017 est.)

1.6% (2016 est.)

5.3% (2015 est.)

Real GDP per capita

$4,100 (2020 est.)

$4,300 (2019 est.)

$4,200 (2018 est.)

note: data are in 2017 dollars

GDP (official exchange rate)

$19.82 billion (2017 est.)

Inflation rate (consumer prices)

5.4% (2017 est.)

6.7% (2016 est.)

Credit ratings

Moody's rating: B2 (2016)

Standard & Poors rating: B- (2020)

note: The year refers to the year in which the current credit rating was first obtained.

GDP - composition, by sector of origin

agriculture: 22.1% (2017 est.)

industry: 42.9% (2017 est.)

services: 35% (2017 est.)

GDP - composition, by end use

household consumption: 43.7% (2017 est.)

government consumption: 19.7% (2017 est.)

investment in fixed capital: 10% (2017 est.)

investment in inventories: 0.4% (2017 est.)

exports of goods and services: 49.3% (2017 est.)

imports of goods and services: -22.3% (2017 est.)

Agricultural products

oil palm fruit, bananas, coconuts, fruit, sweet potatoes, game meat, yams, roots/tubers nes, vegetables, taro

Industries

copra crushing, palm oil processing, plywood production, wood chip production; mining (gold, silver, copper); crude oil and petroleum products; construction, tourism, livestock (pork, poultry, cattle), dairy products, spice products (turmeric, vanilla, ginger, cardamom, chili, pepper, citronella, and nutmeg), fisheries products

Industrial production growth rate

3.3% (2017 est.)

Labor force

3.681 million (2017 est.)

Labor force - by occupation

agriculture: 85%

industry: NA

services: NA

Unemployment rate

2.5% (2017 est.)

2.5% (2016 est.)

Population below poverty line

37% (2002 est.)

Gini Index coefficient - distribution of family income

50.9 (1996)

Household income or consumption by percentage share

lowest 10%: 1.7%

highest 10%: 40.5% (1996)

Budget

revenues: 3.638 billion (2017 est.)

expenditures: 4.591 billion (2017 est.)

Budget surplus (+) or deficit (-)

-4.8% (of GDP) (2017 est.)

Public debt

36.9% of GDP (2017 est.)

36.9% of GDP (2016 est.)

Taxes and other revenues

18.4% (of GDP) (2017 est.)

Fiscal year

calendar year

Current account balance

$4.859 billion (2017 est.)

$4.569 billion (2016 est.)

Exports

$10.6 billion (2018 est.) note: data are in current year dollars

$9.224 billion (2016 est.)

Exports - partners

Australia 26%, China 26%, Japan 22%, Taiwan 7% (2019)

Exports - commodities

natural gas, gold, copper, lumber, crude petroleum, nickel, palm oil, fish, coffee (2019)

Imports

$4.84 billion (2018 est.) note: data are in current year dollars

$2.077 billion (2016 est.)

Imports - partners

Australia 33%, China 19%, Singapore 14%, Malaysia 9% (2019)

Imports - commodities

refined petroleum, excavation machinery, crude petroleum, foodstuffs, delivery trucks (2019)

Reserves of foreign exchange and gold

$1.735 billion (31 December 2017 est.)

$1.656 billion (31 December 2016 est.)

Debt - external

$17.94 billion (31 December 2017 est.)

$18.28 billion (31 December 2016 est.)

Exchange rates

kina (PGK) per US dollar -

3.5131 (2020 est.)

3.4042 (2019 est.)

3.36915 (2018 est.)

2.7684 (2014 est.)

2.4614 (2013 est.)