Papua New Guinea: Economy#
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. A consortium led by a major American oil company is constructing a liquefied natural gas (LNG) production facility that began exporting in April 2014. As the largest investment project in the country's history, it has the potential to double GDP in the near-term and triple Papua New Guinea's export revenue. An American-owned firm also opened PNG's first oil refinery in 2004 and is building a second LNG production facility. The government faces the challenge of ensuring transparency and accountability for revenues flowing from this and other large LNG projects. In 2011 and 2012, the National Parliament passed legislation that created an offshore Sovereign Wealth Fund to manage government surpluses from mineral, oil, and natural gas projects. In recent years, the government has opened up markets in telecommunications and air transport, making both more affordable to the people.
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.
Economic Facts#
| GDP (purchasing power parity) | $28.02 billion (2016 est.) $27.33 billion (2015 est.) $25.63 billion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $19.92 billion (2015 est.) |
| GDP - real growth rate | 2.5% (2016 est.) 6.6% (2015 est.) 7.4% (2014 est.) |
| GDP - per capita (PPP) | $3,500 (2016 est.) $3,500 (2015 est.) $3,400 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 38.1% of GDP (2016 est.) 24% of GDP (2015 est.) -11.7% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 49.4% government consumption: 7.8% investment in fixed capital: 9.9% investment in inventories: 0.4% exports of goods and services: 68.7% imports of goods and services: -36.2% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 22.3% industry: 37.6% services: 40.1% (2016 est.) |
| Agriculture - products | coffee, cocoa, copra, palm kernels, tea, sugar, rubber, sweet potatoes, fruit, vegetables, vanilla; poultry, pork; shellfish |
| Industries | copra crushing, palm oil processing, plywood production, wood chip production; mining (gold, silver, copper); crude oil and petroleum products; construction, tourism |
| Industrial production growth rate | 4.8% (2016 est.) |
| Labor force | 4.365 million (2016 est.) |
| Labor force - by occupation | agriculture: 85% industry: NA% services: NA% (2005 est.) |
| Unemployment rate | 1.9% (2008 est.) 1.6% (2004) |
| 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) |
| Budget | revenues: $3.169 billion expenditures: $4.295 billion (2016 est.) |
| Taxes and other revenues | 15.9% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -5.7% of GDP (2016 est.) |
| Public debt | 39.4% of GDP (2016 est.) 36.9% of GDP (2015 est.) |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 6.3% (2016 est.) 6% (2015 est.) |
| Central bank discount rate | 14% (31 December 2010) 6.92% (31 December 2009) |
| Commercial bank prime lending rate | 8.3% (31 December 2016 est.) 8.73% (31 December 2015 est.) |
| Stock of narrow money | $5.282 billion (31 December 2016 est.) $4.936 billion (31 December 2015 est.) |
| Stock of broad money | $8.085 billion (31 December 2014 est.) $7.477 billion (31 December 2013 est.) |
| Stock of domestic credit | $6.36 billion (31 December 2016 est.) $6.118 billion (31 December 2015 est.) |
| Market value of publicly traded shares | $10.71 billion (31 December 2012 est.) $8.999 billion (31 December 2011 est.) $9.742 billion (31 December 2010 est.) |
| Current account balance | $1.484 billion (2016 est.) $2.134 billion (2015 est.) |
| Exports | $7.886 billion (2016 est.) $8.377 billion (2015 est.) |
| Exports - commodities | oil, gold, copper ore, logs, palm oil, coffee, cocoa, crayfish, prawns |
| Exports - partners | Japan 17.4%, Australia 15.9%, China 12.1% (2015) |
| Imports | $1.83 billion (2016 est.) $2.267 billion (2015 est.) |
| Imports - commodities | machinery and transport equipment, manufactured goods, food, fuels, chemicals |
| Imports - partners | Australia 25.9%, China 20%, Singapore 12.6%, Malaysia 7.2%, US 4.2%, Indonesia 4.1%, South Korea 4% (2015) |
| Reserves of foreign exchange and gold | $1.629 billion (31 December 2016 est.) $1.738 billion (31 December 2015 est.) |
| Debt - external | $22.04 billion (31 December 2016 est.) $20.41 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $NA |
| Stock of direct foreign investment - abroad | $NA |
| Exchange rates | kina (PGK) per US dollar - 3.156 (2016 est.) 2.7684 (2015 est.) 2.7684 (2014 est.) 2.4614 (2013 est.) 2.08 (2012 est.) |