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Papua New Guinea vs. Indonesia

Economy

Papua New GuineaIndonesia
Economy - overview

Papua New Guinea (PNG) is richly endowed with natural resources, but exploitation has been hampered by rugged terrain, land tenure issues, and the high cost of developing infrastructure. The economy has a small formal sector, focused mainly on the export of those natural resources, and an informal sector, employing the majority of the population. Agriculture provides a subsistence livelihood for 85% of the people. The global financial crisis had little impact because of continued foreign demand for PNG's commodities.

Mineral deposits, including copper, gold, and oil, account for nearly two-thirds of export earnings. Natural gas reserves amount to an estimated 155 billion cubic meters. Following construction of a $19 billion liquefied natural gas (LNG) project, PNG LNG, a consortium led by ExxonMobil, began exporting liquefied natural gas to Asian markets in May 2014. The project was delivered on time and only slightly above budget. The success of the project has encouraged other companies to look at similar LNG projects. French supermajor Total is hopes to begin construction on the Papua LNG project by 2020. Due to lower global commodity prices, resource revenues of all types have fallen dramatically. PNG’s government has recently been forced to adjust spending levels downward.

Numerous challenges still face the government of Peter O'NEILL, including providing physical security for foreign investors, regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and maintaining good relations with Australia, its former colonial ruler. Other socio-cultural challenges could upend the economy including chronic law and order and land tenure issues. In August, 2017, PNG launched its first-ever national trade policy, PNG Trade Policy 2017-2032. The policy goal is to maximize trade and investment by increasing exports, to reduce imports, and to increase foreign direct investment (FDI).

Indonesia, the largest economy in Southeast Asia, has seen a slowdown in growth since 2012, mostly due to the end of the commodities export boom. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth. Indonesia’s annual budget deficit is capped at 3% of GDP, and the Government of Indonesia lowered its debt-to-GDP ratio from a peak of 100% shortly after the Asian financial crisis in 1999 to 34% today. In May 2017 Standard & Poor’s became the last major ratings agency to upgrade Indonesia’s sovereign credit rating to investment grade.

Poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among its regions are still part of Indonesia’s economic landscape. President Joko WIDODO - elected in July 2014 – seeks to develop Indonesia’s maritime resources and pursue other infrastructure development, including significantly increasing its electrical power generation capacity. Fuel subsidies were significantly reduced in early 2015, a move which has helped the government redirect its spending to development priorities. Indonesia, with the nine other ASEAN members, will continue to move towards participation in the ASEAN Economic Community, though full implementation of economic integration has not yet materialized.

GDP (purchasing power parity)
$30.19 billion (2017 est.)
$29.44 billion (2016 est.)
$28.98 billion (2015 est.)

note: data are in 2017 dollars

$3.25 trillion (2017 est.)
$3.093 trillion (2016 est.)
$2.945 trillion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
2.5% (2017 est.)
1.6% (2016 est.)
5.3% (2015 est.)
5.1% (2017 est.)
5% (2016 est.)
4.9% (2015 est.)
GDP - per capita (PPP)
$3,700 (2017 est.)
$3,600 (2016 est.)
$3,700 (2015 est.)

note: data are in 2017 dollars

$12,400 (2017 est.)
$12,000 (2016 est.)
$11,500 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 22.1% (2017 est.)
industry: 42.9% (2017 est.)
services: 35% (2017 est.)
agriculture: 13.7% (2017 est.)
industry: 41% (2017 est.)
services: 45.4% (2017 est.)
Population below poverty line
37% (2002 est.)
10.9% (2016 est.)
Household income or consumption by percentage share
lowest 10%: 1.7%
highest 10%: 40.5% (1996)
lowest 10%: 3.4%
highest 10%: 28.2% (2010)
Inflation rate (consumer prices)
5.4% (2017 est.)
6.7% (2016 est.)
3.8% (2017 est.)
3.5% (2016 est.)
Labor force
3.681 million (2017 est.)
125 million (2016 est.)
Labor force - by occupation
agriculture: 85%
industry: NA
services: NA
agriculture: 32%
industry: 21%
services: 47% (2016 est.)
Unemployment rate
2.5% (2017 est.)
2.5% (2016 est.)
5.4% (2017 est.)
5.6% (2016 est.)
Distribution of family income - Gini index
50.9 (1996)
36.8 (2009)
39.4 (2005)
Budget
revenues: 3.638 billion (2017 est.)
expenditures: 4.591 billion (2017 est.)
revenues: 131.7 billion (2017 est.)
expenditures: 159.6 billion (2017 est.)
Industries
copra crushing, palm oil processing, plywood production, wood chip production; mining (gold, silver, copper); crude oil and petroleum products; construction, tourism, livestock (pork, poultry, cattle), dairy products, spice products (turmeric, vanilla, ginger, cardamom, chili, pepper, citronella, and nutmeg), fisheries products
petroleum and natural gas, textiles, automotive, electrical appliances, apparel, footwear, mining, cement, medical instruments and appliances, handicrafts, chemical fertilizers, plywood, rubber, processed food, jewelry, and tourism
Industrial production growth rate
3.3% (2017 est.)
4.1% (2017 est.)
Agriculture - products
coffee, cocoa, copra, palm kernels, tea, sugar, rubber, sweet potatoes, fruit, vegetables, vanilla; poultry, pork; shellfish
rubber and similar products, palm oil, poultry, beef, forest products, shrimp, cocoa, coffee, medicinal herbs, essential oil, fish and its similar products, and spices
Exports
$8.522 billion (2017 est.)
$9.224 billion (2016 est.)
$168.9 billion (2017 est.)
$144.4 billion (2016 est.)
Exports - commodities
liquefied natural gas, oil, gold, copper ore, nickel, cobalt logs, palm oil, coffee, cocoa, copra, spice (turmeric, vanilla, ginger, and cardamom), crayfish, prawns, tuna, sea cucumber
mineral fuels, animal or vegetable fats (includes palm oil), electrical machinery, rubber, machinery and mechanical appliance parts
Exports - partners
Australia 18.9%, Singapore 17.5%, Japan 13.8%, China 12.7%, Philippines 4.7%, Netherlands 4.2%, India 4.2% (2017)
China 13.6%, US 10.6%, Japan 10.5%, India 8.4%, Singapore 7.6%, Malaysia 5.1%, South Korea 4.8% (2017)
Imports
$1.876 billion (2017 est.)
$2.077 billion (2016 est.)
$150.1 billion (2017 est.)
$129.2 billion (2016 est.)
Imports - commodities
machinery and transport equipment, manufactured goods, food, fuels, chemicals
mineral fuels, boilers, machinery, and mechanical parts, electric machinery, iron and steel, foodstuffs
Imports - partners
Australia 30.1%, China 17.3%, Singapore 10.2%, Malaysia 8.2%, Indonesia 4% (2017)
China 23.2%, Singapore 10.9%, Japan 10%, Thailand 6%, Malaysia 5.6%, South Korea 5.3%, US 5.2% (2017)
Debt - external
$17.94 billion (31 December 2017 est.)
$18.28 billion (31 December 2016 est.)
$344.4 billion (31 December 2017 est.)
Exchange rates
kina (PGK) per US dollar -
3.179 (2017 est.)
3.133 (2016 est.)
3.133 (2015 est.)
2.7684 (2014 est.)
2.4614 (2013 est.)
Indonesian rupiah (IDR) per US dollar -
13,385 (2017 est.)
13,308.3 (2016 est.)
13,308.3 (2015 est.)
13,389.4 (2014 est.)
11,865.2 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
36.9% of GDP (2017 est.)
36.9% of GDP (2016 est.)
28.8% of GDP (2017 est.)
28.3% of GDP (2016 est.)
Reserves of foreign exchange and gold
$1.735 billion (31 December 2017 est.)
$1.656 billion (31 December 2016 est.)
$130.2 billion (31 December 2017 est.)
Current Account Balance
$4.859 billion (2017 est.)
$4.569 billion (2016 est.)
-$17.33 billion (2017 est.)
-$16.95 billion (2016 est.)
GDP (official exchange rate)
$19.82 billion (2017 est.)
$1.015 trillion (2017 est.)
Stock of direct foreign investment - at home

NA

$251.5 billion (31 December 2017 est.)
$229.1 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad

NA

$20.5 billion (31 December 2017 est.)
$18.42 billion (31 December 2016 est.)
Market value of publicly traded shares
$10.71 billion (31 December 2012 est.)
$8.999 billion (31 December 2011 est.)
$9.742 billion (31 December 2010 est.)
$523.8 billion (31 December 2017 est.)
$426 billion (31 December 2016 est.)
$353.3 billion (31 December 2015 est.)
Central bank discount rate
14% (31 December 2010)
6.92% (31 December 2009)
6.37% (31 December 2010)
6.46% (31 December 2009)

note: this figure represents the 3-month SBI rate; the Bank of Indonesia has not employed the one-month SBI since September 2010

Commercial bank prime lending rate
8.4% (31 December 2017 est.)
8.38% (31 December 2016 est.)
11.07% (31 December 2017 est.)
11.89% (31 December 2016 est.)
note: these figures represent the average annualized rate on working capital loans
Stock of domestic credit
$7.091 billion (31 December 2017 est.)
$7.223 billion (31 December 2016 est.)
$422.4 billion (31 December 2017 est.)
$397.7 billion (31 December 2016 est.)
Stock of narrow money
$5.409 billion (31 December 2017 est.)
$5.05 billion (31 December 2016 est.)
$102.7 billion (31 December 2017 est.)
$92.11 billion (31 December 2016 est.)
Stock of broad money
$5.409 billion (31 December 2017 est.)
$5.05 billion (31 December 2016 est.)
$102.7 billion (31 December 2017 est.)
$92.11 billion (31 December 2016 est.)
Taxes and other revenues
18.4% (of GDP) (2017 est.)
13% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-4.8% (of GDP) (2017 est.)
-2.7% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 3.6%
male: 4.3%
female: 3% (2010 est.)
total: 15.6%
male: 15.6%
female: 15.6% (2017 est.)
GDP - composition, by end use
household consumption: 43.7% (2017 est.)
government consumption: 19.7% (2017 est.)
investment in fixed capital: 10% (2017 est.)
investment in inventories: 0.4% (2017 est.)
exports of goods and services: 49.3% (2017 est.)
imports of goods and services: -22.3% (2017 est.)
household consumption: 57.3% (2017 est.)
government consumption: 9.1% (2017 est.)
investment in fixed capital: 32.1% (2017 est.)
investment in inventories: 0.3% (2017 est.)
exports of goods and services: 20.4% (2017 est.)
imports of goods and services: -19.2% (2017 est.)
Gross national saving
36.8% of GDP (2017 est.)
38% of GDP (2016 est.)
33.7% of GDP (2015 est.)
31.7% of GDP (2017 est.)
32% of GDP (2016 est.)
32% of GDP (2015 est.)

Source: CIA Factbook