Papua New Guinea Economy Profile 2008

Economy - overview

Papua New Guinea is richly endowed with natural resources, but exploitation has been hampered by rugged terrain and the high cost of developing infrastructure. Agriculture provides a subsistence livelihood for 85% of the population. Mineral deposits, including copper, gold, and oil, account for nearly two-thirds of export earnings. The government of Prime Minister SOMARE has expended much of its energy remaining in power. He was the first prime minister ever to serve a full five-year term. The government also brought stability to the national budget, largely through expenditure control; however, it relaxed spending constraints in 2006 and 2007 as elections approached. Numerous challenges still face the government including regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and balancing relations with Australia, its former colonial ruler. Other socio-cultural challenges could upend the economy including a worsening HIV/AIDS epidemic and chronic law and order and land tenure issues. Australia will supply more than $300 million in aid in FY07/08, which accounts for nearly 20% of the national budget.

GDP (purchasing power parity)

$16.56 billion (2007 est.)

GDP (official exchange rate)

$5.914 billion (2007 est.)

GDP - real growth rate

4% (2007 est.)

GDP - per capita (PPP)

$2,900 (2007 est.)

GDP - composition by sector

agriculture: 35.5%
industry: 37%
services: 27.5% (2007 est.)

Population below poverty line

37% (2002 est.)

Household income or consumption by percentage share

lowest 10%: 1.7%
highest 10%: 40.5% (1996)

Inflation rate (consumer prices)

1.8% (2007 est.)

Investment (gross fixed)

20.4% of GDP (2007 est.)

Labor force

3.557 million (2007 est.)

Labor force - by occupation

agriculture: 85%
industry: NA%
services: NA% (2005 est.)

Unemployment rate

1.9% up to 80% in urban areas (2004)

Distribution of family income - Gini index

50.9 (1996)

Budget

revenues: $2.209 billion
expenditures: $1.994 billion (2007 est.)

Public debt

43.7% of GDP (2007 est.)

Industries

copra crushing, palm oil processing, plywood production, wood chip production; mining of gold, silver, and copper; crude oil production, petroleum refining; construction, tourism

Industrial production growth rate

4.8% (2007 est.)

Electricity - production

3.698 billion kWh (2005)

Electricity - consumption

3.439 billion kWh (2005)

Electricity - exports

0 kWh (2005)

Electricity - imports

0 kWh (2005)

Oil - production

50,000 bbl/day (January 2006 est.)

Oil - consumption

26,000 bbl/day (2005 est.)

Oil - imports

24,020 bbl/day (2004)

Oil - exports

44,580 bbl/day (2004)

Oil - proved reserves

240 million bbl (1 January 2006 est.)

Natural gas - production

95.91 million cu m (2005 est.)

Natural gas - consumption

95.91 million cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

331.3 billion cu m (1 January 2006 est.)

Current Account Balance

$314 million (2007 est.)

Agriculture - products

coffee, cocoa, copra, palm kernels, tea, sugar, rubber, sweet potatoes, fruit, vegetables, vanilla; shell fish, poultry, pork

Exports

$4.553 billion f.o.b. (2007 est.)

Exports - commodities

oil, gold, copper ore, logs, palm oil, coffee, cocoa, crayfish, prawns

Exports - partners

Australia 30.2%, Japan 8.2%, China 5.7% (2006)

Imports

$2.269 billion f.o.b. (2007 est.)

Imports - commodities

machinery and transport equipment, manufactured goods, food, fuels, chemicals

Imports - partners

Australia 52%, Singapore 12.6%, China 5.9%, Japan 4.3% (2006)

Reserves of foreign exchange and gold

$1.664 billion (31 December 2007 est.)

Debt - external

$1.814 billion (31 December 2007 est.)

Stock of direct foreign investment - at home

$NA

Stock of direct foreign investment - abroad

$NA

Market value of publicly traded shares

$4.863 billion (2005)

Economic aid - recipient

$266.1 million (2005)

Currency (code)

kina (PGK)

Exchange rates

kina per US dollar - 3.03 (2007), 3.0643 (2006), 3.08 (2005), 3.2225 (2004), 3.5635 (2003)

Fiscal year

calendar year