Papua New Guinea economy grew 8% last year

THE PNG economy is estimated by the Bank of Papua New Guinea (BPNG) to have expanded strongly by around 8.0% last year, in line with the projection made in the last September’s monetary policy statement (MPS), The National reports.

The growth is mainly attributed to increase in the building and construction, transportation, storage, communication, manufacturing and commerce sectors.

The increases in these areas were associated with the current construction phase of the LNG, which has affected the rest of the economy.

The increase in the building and construction sector was also associated with public investment on infrastructure and new building projects as well as those undertaken by the private sector.

Government funding has increased as well as the production of non-mineral export commodities due to increased prices.

The economy continued to expand rapidly in spite of the delay of the Ramu nickel-cobalt (NiCo) mine.

This year  the economy is projected to grow by around 9.5% , driven by increased activity in the mineral sector and a pick-up in the construction of the LNG project.

The manufacturing, commerce, transportation, storage and communication,  agriculture, forestry, fisheries,  finance and other service sectors are also expected to contribute significantly.

The growth in the mineral sector is anticipated upon  the commencement of the Ramu NiCo and increased production at existing mines, which would more than offset a decline in petroleum production.

The increase in the manufacturing and commerce sectors will be based on the pickup in construction activity and higher prices of export commodities, respectively.

The growth in the transportation, storage and communication sector is driven by the transportation sub-sector, reflecting increased activity in shipping, air and land transportation, associated with higher passenger travel and cargo haulage.

BPNG expects the economy to continue to grow next year and 2013, but at a lower rate.

This is due to the completion of the construction phase of the LNG project, especially in 2013.

The growth will be driven mainly by the full year production by Ramu NiCo and increased production of gold at the Lihir, Hidden Valley and Simberi mines.

High prices and production of non-mineral export commodities will also contribute to the growth.