PAPUA New Guinea’s economy is expected to grow at a rate of 3.6% in 2024 and 4.6% in 2025, according to April 2024 Asian Development Outlook (ADO) report.
This is due to the region’s improved prospects for the mining sector, although growth slowed to 2.0% in 2023 as a result of decreased production in the resource sector.
The report says PNG’s economy is set to grow by 3.3% in 2024 due to the resumption of production at the Porgera Gold Mine.
Country Director of the Asian Development Bank (ADB) Said Zaidansyah said the medium-term outlook for PNG’s economy remains positive, however, there are looming challenges.
“Foreign exchange restrictions and frequent power disruptions continue to dampen activity in the rest of the economy and the fallout from civil unrest in January also clouds the outlook,” he said.
The ADB reports stated that reforms to improve the power sector’s financial sustainability and generation infrastructure, including increased use of renewable energy and private sector investment are needed to help address power supply constraints on growth.
The report further stated that ADB’s financial plan would support and address foreign exchange restrictions, and business constraints for PNG could ease under a new International Monetary Fund-led programme to be established this year (2024).
“With the reopening of the Porgera gold mine, additional operation-related spending on goods and services and employment as well as providing foreign exchange inflows are expected,” the report stated.
Meanwhile, the report highlighted that inflation is expected to rise from 2.3% in 2023 to 4.5 in 2024 and even further to 4.8% in 2025, largely because of continued exchange rate depreciation and impact of the recent civil unrest.
“Costs of many consumer goods have soared, with prices for food and non- alcohol beverages rising by 7% in 2023.”
