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The Economy of Papua New Guinea

Papua New Guinean Economy

Papua New Guinea's map

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 637 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:

GDP - real growth rate: 6.3% (2008 est.) 6% (2007 est.) 2.6% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 32.8% industry: 36.5% services: 30.6% (2008 est.)

Population below poverty line:

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)

Inflation rate (consumer prices):

Labor force: 3.639 million (2008 est.)

Labor force - by occupation: agriculture: 75% industry: NA% services: NA% (2005 est.)

Unemployment rate: 1.9% up to 80% in urban areas (2004)

Budget: revenues: $3.098 billion expenditures: $2.949 billion (2008 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: 6.3% (2008 est.)

Electricity - production: 2.875 billion kWh (2006 est.)

Electricity - production by source:

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 - exports: 39,310 bbl/day (2005)

Oil - imports: 24,150 bbl/day (2005)

Oil - proved reserves: 88 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.)

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

Exports: $5.658 billion f.o.b. (2008 est.)

Exports - commodities: oil, gold, copper ore, logs, palm oil, coffee, cocoa, crayfish, prawns

Exports - partners: Australia 27.3%, Japan 9.5%, China 5.7% (2007)

Imports: $3.013 billion f.o.b. (2008 est.)

Imports - commodities: machinery and transport equipment, manufactured goods, food, fuels, chemicals

Imports - partners: Australia 51.3%, Singapore 11.6%, China 7.9%, Japan 5.7% (2007)

Debt - external: $1.582 billion (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

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: