World Bank expects Papua New Guinea's GDP to reach 16pc

THE World Bank has projected Papua New Guinea’s gross domestic product (GDP) growth to reach 16 per cent this year, with major LNG project production expected to peak in 2016. 

The bank’s 2015 Economic Update said PNG’s economy’s transition, following the ExxonMobil-led PNG-LNG project move from construction to production in 2014, would result in smaller spillovers to the rest of the economy. 

“In Papua New Guinea, growth would temporarily spike to 16 per cent in 2015, as liquefied natural gas exports, which began in May 2014, increase rapidly, more than offsetting the completion of LNG-related construction work,” the bank said. 

“Gas exports will become increasingly important in Papua New Guinea.”

The bank said prudent fiscal and monetary policy; investing in both high quality human and physical capital; accelerating of development of robust institutions; and continued integration into global economy would all help secure PNG’s future.

It said growth in Pacific Island countries would be supported by rising trade, tourism, and remittances, and generally positive country-specific developments. 

The bank said in the six months since the previous East Asia and Pacific Economic Update, regional economic landscape has been dominated by two key developments in the global economy – the sustained decline in world oil prices and a rapid dollar appreciation against Euro and Yen.