LNG exports to back PNG's growth by 6% in 2014

THE start of the liquefied natural gas (LNG) export will support Papua New Guinea’s gross domestic product (GDP) growth of 6% this year, picking up to a record 21% next year, an new Asian Development Bank’s (ADB) report said.

ADB’s flagship economic report, the Asian Development Outlook (ADO), said the rich-poor gap in PNG was being driven by the same forces of globalisation, technological progress and market-oriented reform that accelerated the region’s rapid growth. 

“While GDP growth is very optimistic for this year and especially next year, the gap between rich and poor is increasing,” Aaron Batten, ADB’s country economist for PNG, said.

“A focus must be placed on narrowing inequality to ensure future growth is sustainable.”

The report said countries across the Asia-Pacific region were looking to fiscal policy to stem rising inequality and to act as a tool for stimulating job growth and creation. 

While significant progress had been made by in improving the poverty focus of government expenditure, poor implementation capacity was diminishing the impact of public spending on reducing inequality and lifting social welfare. 

The ADO report said spending on the government’s four priority“development enablers” –infrastructure, education, health, and law and order – continue to grow rapidly, increasing by 38% this yeare over 2012 levels. 

Government also made significant progress in reducing sub-national fiscal inequalities over recent years, placing previously marginalised provinces in a much stronger fiscal position to fund routine service delivery.