Highly profitable by global standards, Papua New Guinea’s banking sector has traditionally focused on the government, larger firms and high-net-worth individuals. Despite significant challenges linked to poor infrastructure, inadequate credit information and a largely rural population, commercial lenders are developing innovative means of...
Although economic expansion slowed in 2013 as construction on ExxonMobil’s $19bn Papua New Guinea liquefied natural gas (LNG) project wound down – albeit from 9.1% in 2012 to a still healthy 5.2% in 2013, according to the Bank of PNG (BPNG) – the country stands on the cusp of rapid resource-led growth. Despite ranking as the world’s 115th-...
While rapid increases in government spending come at the right time in Papua New Guinea’s economic cycle, the key will be the timely execution of budgeted projects. Affected by low disbursement levels, particularly for its capital expenditure, the government is enacting key reforms to streamline projects and strengthen revenue collection. As...
Following three years of sharp appreciation, Papua New Guinea’s currency, the kina, reversed course from late 2012 as construction on the PNG liquefied natural gas (LNG) project began to taper and commodity export revenues contracted. Fiscal spending, largely financed in kina, continued to drive demand for imports and compounded the currency’s...
By using an expansionary fiscal policy to sustain aggregate demand amid tapering of the Papua New Guinea liquefied natural gas (LNG) construction phase, the government is relying on public markets to finance its deficit. On the central bank’s advice, the Department of Treasury has rebalanced its borrowing profile towards local-currency...
The Pacific Islands’ largest economy, PNG also poses the largest security challenges to doing business. Security firms operating locally estimate the cost of doing business in PNG is some 30% higher than neighbouring markets, excluding property, but the economic cost of insecurity is far higher. “A significant improvement in law and order (…)...
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