Asia and Oceania

Papua New Guinea
Last reviewed: 06 August 2009

Country information

See entire profile

Economy

Basic economic facts

GDP: K20.9 million (2009 proj)
GDP per head: K3.065 (2008 proj)
Annual inflation forecast: 7.2% (2009 proj)
Real GDP growth: 4.0% (2009 proj)
Major industries: PNG's economy has a dual economy; a 'modern' economy based on mining (gold, silver, copper, nickel) and petroleum and natural gas production, and a 'traditional' one based on fishing, forestry, coffee, palm oil, copra, cocoa and vanilla.
Major trading partners: Australia, Japan, China, Germany, USA, UK, Singapore, New Zealand and South Korea
Trade and investment with the UK: There is approximately £600 million worth of British trade in PNG. The UK is the destination for 2.6% of PNG's exports; 0.9% of PNG's imports come from the UK. The Swire Group of Companies, Maybey & Johnson (bridges), Price Waterhouse Coopers (Consultancy), Courts (retail), British American Tobacco, Arup Pacific Pty Ltd (consulting engineers), Intercontinental Hotel Group and Rio Tinto are among the British companies with subsidiaries in PNG.
Aid and development: Australia is the largest foreign aid donor to PNG, followed by the EU. There is no UK bilateral aid programme, but the UK contributes 5 Million Australian Dollars a year to PNG's development through the European Union. The UK Government also funds a network of more than 60 advisers in PNG. 55 of these operate through the UK Volunteer Service Overseas Network with a further 5 ODI fellows on attachment to Government Departments. The British High Commission also administers a small-scale development programme called the UK/PNG Bi-lateral Fund.
Exchange rate: Kina 1 = £0.2319 April 2009

Current strengths are rich natural resources and strong foreign donor support. High international prices for major export commodities drive a strong export performance, helping to realise stability in the exchange rate and a record level of foreign exchange reserves equivalent to seven months import cover.

GDP is forecast to rise by 6.2% in 2009, the sixth successive year of GDP growth equal to or above the population growth of 2.7%. Inflation and interest rates are expected to remain at low levels. In 2009 proceeds from windfall revenue from high commodity prices is expected to be minimal due to the global economic downturn.