UN Economic Brief Issue 2 - 2023

Papua New Guinea’s real gross domestic product is estimated to have grown by 4.0% in 2023 compared with 4.6% in 2022. This outturn was driven by a strong performance in the non-resource sector supported by an increase in public spending, strong business activity, and an 8.9% expansion in credit to the private sector. By contrast, the resource sector contracted owing to continued delays in reopening the Porgera gold mine throughout the year, among other production challenges. However, PNG outperformed the global and Asia-Pacific growth averages for the second consecutive year. In 2023, the Government released its new year-on-year declines at the end of the third quarter of 2023, whereas restaurants and hotels and clothing and footwear recorded increased inflation over the same period.

Notwithstanding widespread violence and looting in urban areas in January 2024 and the associated downside risks, the outlook for PNG remains positive. With the opening of the Porgera mine, the commencement of the Papua LNG project and other resource projects in 2024, sustained growth in agriculture and services, and the PNG Connect infrastructure programme continuing apace, the country is projected to grow at 4.3% in 2024 and stabilize around 3% in the coming years. If executed well, the MTDP IV, released in 2023, should produce sustainable and inclusive growth outcomes for the country.