Papua New Guinea Economy Profile 2009

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 75% 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, currently the highest rate in all of East Asia and the Pacific, and chronic law and order and land tenure issues. Australia supplied more than $300 million in aid in FY07/08, which accounts for nearly 20% of the national budget. A consortium led by a major American oil company hopes to begin the commercialization of the country's estimated 227 billion cubic meters of natural gas reserves through the construction of a liquefied natural gas (LNG) production facility by 2010. The project has the potential to double the GDP of Papua New Guinea.

GDP (purchasing power parity)

$13.21 billion (2008 est.)
$12.32 billion (2007 est.)
$11.62 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$8.092 billion (2008 est.)

GDP - real growth rate

7.2% (2008 est.)
6% (2007 est.)
2.6% (2006 est.)

GDP - per capita (PPP)

$2,200 (2008 est.)
$2,100 (2007 est.)
$2,000 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 33.3%
industry: 36.3%
services: 30.4% (2008 est.)

Population below poverty line

37% (2002 est.)

Labor force

3.639 million (2008 est.)

Labor force - by occupation

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

Unemployment rate

1.9% (2004)

Household income or consumption by percentage share

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

Distribution of family income - Gini index

50.9 (1996)

Investment (gross fixed)

19.4% of GDP (2008 est.)

Budget

revenues: $2.62 billion
expenditures: $2.797 billion (2008 est.)

Public debt

37.2% of GDP (2008 est.)
59.3% of GDP (2004 est.)

Inflation rate (consumer prices)

10.8% (2008 est.)
0.9% (2007 est.)

Central bank discount rate

7% (31 December 2008)
7.38% (31 December 2007)

Commercial bank prime lending rate

NA% (31 December 2008)
9.78% (31 December 2007)

Stock of money

$2.009 billion (31 December 2008)
$1.685 billion (31 December 2007)

Stock of quasi money

$1.729 billion (31 December 2008)
$1.482 billion (31 December 2007)

Stock of domestic credit

$2.092 billion (31 December 2008)
$1.486 billion (31 December 2007)

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

5.6% (2008 est.)

Electricity - production

2.875 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 54.1%
hydro: 45.9%
nuclear: 0%
other: 0% (2001)

Electricity - consumption

2.674 billion kWh (2006 est.)

Electricity - exports

0 kWh (2007 est.)

Electricity - imports

0 kWh (2007 est.)

Oil - production

42,100 bbl/day (2008 est.)

Oil - consumption

29,050 bbl/day (2006 est.)

Oil - imports

24,150 bbl/day (2005)

Oil - exports

39,310 bbl/day (2005)

Oil - proved reserves

170 million bbl (1 January 2008 est.)

Natural gas - production

140 million cu m (2006 est.)

Natural gas - consumption

140 million cu m (2006 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

0 cu m (2007 est.)

Natural gas - proved reserves

226.5 billion cu m (1 January 2008 est.)

Current Account Balance

$710 million (2008 est.)
$193.6 million (2007 est.)

Agriculture - products

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

Exports

$5.719 billion (2008 est.)
$4.748 billion (2007 est.)

Exports - commodities

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

Exports - partners

Australia 28%, Japan 9.5%, China 5.5% (2008)

Imports

$3.124 billion (2008 est.)
$2.629 billion (2007 est.)

Imports - commodities

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

Imports - partners

Australia 43.3%, Singapore 15.9%, China 10.2%, Japan 5.9% (2008)

Reserves of foreign exchange and gold

$1.987 billion (31 December 2008 est.)
$2.087 billion (31 December 2007 est.)

Debt - external

$1.651 billion (31 December 2008 est.)
$1.646 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

$NA (31 December 2008)
$NA (31 December 2007)
$6.632 billion (31 December 2006)

Economic aid - recipient

$266.1 million (2005)

Currency (code)

kina (PGK)

Currency (code)

PGK

Exchange rates

kina (PGK) per US dollar - 2.6956 (2008 est.), 3.03 (2007), 3.0643 (2006), 3.08 (2005), 3.2225 (2004)

Fiscal year

calendar year