Prime Minister Hon. James Marape has warned that Papua New Guinea will not be immune from the ripple effects of global economic shocks stemming from recent United States tariff hikes, and has urged the country to remain vigilant as his government monitors and manages the situation.
Prime Minister Marape said today the sweeping tariff increases imposed by the United States on China and other key global economies represent a “tectonic shift in global trade and commerce” that will inevitably have downstream consequences for small, import- dependent nations like Papua New Guinea.
“These are not minor trade adjustments”, the Prime Minister stressed. “This is a major global event. When the world’s number one economy imposes tariffs of over 200 percent on the number two economy as well as all other economies, the entire global trading system is shaken. While we do not have a significant trade relationship with the United States, we are closely integrated with China, Japan, South Korea, Southeast Asia, Europe, and Australia economies that are directly impacted.”
Prime Minister Marape said PNG’s Treasury Department, the Central Bank, and his own department are closely monitoring the situation and assessing the potential economic risks, particularly with regard to inflation and the rising cost of goods and services.
“This is a time for our people to understand that there are strong global economic headwinds ahead,” he said.
“We must prepare for the possibility of price increases, supply chain disruptions, and investment slowdowns. But we also want to assure the country that we are managing our economy prudently and are focused on our national budget priorities.”
The Prime Minister acknowledged that some impacts may be unavoidable in the short term, but expressed confidence in the medium-to-long-term outlook, citing over US$40 billion worth of resource projects in the pipeline.
“In the next 10 years, we expect nearly $40billion in foreign direct investments into our country through projects such as Papua LNG, Pasca A, P’nyang LNG, Wafi-Golpu, and potential progresson Frieda River and the Wildebeest LNG in Gulf and Maliu Oil in Central provinces”, he stated.
“These are real projects, with real partners. Pasca and P’nyang are already signed, and Papua LNG is progressing with Total Energies and Exxon Mobil. Porgera is operating now and we shall close a better project agreement for Wafi-Golpu soon. These developments will underpin our economy for the next two decades and secure long -term economic stability.”
Prime Minister Marape also noted that while global conditions are beyond PNG’s control, the government is staying the course on fiscal consolidation. He added that the 2024 Final Budget Outcome will be released and will show our financial management in 2024 amidst difficult global conditions.
“Unlike many peer economies struggling to attract capital, we have the largest multinationals operating here. Our job is to keep investor confidence high and ensure policy consistency. I am optimistic that despite the challenges of today, the future of Papua New Guinea remains bright,” he said.