THE economic outlook for Papua New Guinea (PNG) is promising, according to PricewaterhouseCoopers (PwC) in their recent analysis of the 2025 National Budget. PwC forecasts robust GDP growth rates of 4.9% in 2024 and 4.7% in 2025, signaling resilience and potential in the nation’s economy.
A key highlight of the report is the anticipated diversification beyond the resources sector, which is expected to grow at a slower pace of 3.4%. This shift marks a critical move towards a more balanced and sustainable economy, reducing reliance on volatile global commodity markets.
The outlook is bolstered by stable prices for key exports such as gold and copper, alongside increased production from projects like the Porgera mine. However, PwC notes that Porgera’s full production will not resume until 2026, underscoring the need for sound project management and regulatory oversight.
Inflation is projected to stabilize at 4.5% by 2025, with underlying and headline inflation rates converging. This bodes well for consumer confidence, ensuring that household purchasing power remains intact. Although government borrowing is increasing, it is expected to decline as a share of GDP, suggesting improved fiscal management.
PwC’s analysis emphasizes the importance of strategic government spending. The allocation of over one-third of operational expenditures to health and education reflects a strong commitment to social development and human capital investment. Infrastructure, security, and law and order have also been prioritized, highlighting the government’s holistic approach to governance.
For sustained economic progress, PwC underscores the importance of transparency and accountability in fiscal policy. Ensuring that borrowed funds are invested in high-impact projects will be crucial. Collaboration with the private sector and civil society will also play a vital role in driving growth and enhancing the quality of life for PNG’s citizens.
As PNG moves forward, the government’s ability to maintain a coherent fiscal strategy and address immediate needs while fostering long-term development will be key to realizing the country’s full economic potential.
