PNG economy forecast to pass K110 billion in 2022

Prime Minister James Marape at the 2022 PNG Update.

The PNG economy is estimated to go pass a K110 billion (US$31 billion) in 2022.

Prime Minister James Marape speaking at the 2022 PNG Update hosted by the University of PNG in Partnership with the Australia National University said in December 2018, PNG economy was at K79.4 billion (US$22.5 billion) Gross Domestic Product (GDP) and in 2019 the economy was at K83.8 billion (US$23.7 billion).

He said despite the COVID-19 induced economic contractions of 2020 and 2021, both World Bank and International Monetary Fund (IMF) estimate that PNG’s economy will go pass a K110 billion (US$31 billion) in 2022.

He said the government in the last three years has been expansionist by using budget policies to ensure that they fuel the economy for debt restructuring and reduction, economic stimulus and growth, as well as productive sustenance of the country in public services and service delivery.

Marape, commenting on the 2022 Budget, said the National Research Institute recognised that the massive 2022 billion Kina budget will contribute to stimulating the economy via spending and subsequent effect on increasing consumer demand, consistent with the Keynesian school of thought.

“It recognises that consumer demand is vital for businesses to perform well, and create more income and employment in the economy,” he said.

“The national GDP in 2019 was K83.8 billion (US$23.7 billion) with a growth rate of 4.5 percent.

The GDP projected for 2022 is K109 billion (US$30 billion), a growth rate of 4 percent.

BSP delivering a net profit of K1.075 billion (US$306 million) in 2021 off the back of a strangled economy can only mean that high budgetary investments by the government have found their way into the banking sector.”

Marape said he is happy that the World Bank recognises growth in the agriculture sector, which has weathered the pandemic better than others. “The relatively strong performance of the agriculture sector reflects additional government financial support to small to medium enterprises during the pandemic. Our agriculture price support and freight subsidies will continue going forward,” he said.