Business Potential in Papua New Guinea (PNG) is expected to experience economic growth, with a projected 3.7% growth in 2023, reflecting the government’s fiscal consolidation efforts and the removal of COVID-19 restrictions. The country’s recovery above its pre-pandemic GDP is attributed to high commodity prices and the acceleration of economic growth. However, the World Bank’s Economic Update for PNG highlights the need for continued fiscal consolidation and the implementation of plans to reduce the budget deficit. The report emphasizes the substantial requirements for human capital and infrastructure spending, which could pose challenges to medium-term plans for fiscal consolidation. The government’s commitment to safeguarding economic stability and pursuing gender equality is essential for delivering major economic benefits for all Papua New Guineans.
The economic case for action on gender equality in PNG is underscored by the World Bank’s report, which emphasizes that addressing urgent gender inequities will benefit both men and women in the country. The report highlights the need for comprehensive programs to improve training, education, and employment opportunities, particularly for the large population of young people in PNG. The government’s pursuit of fiscal consolidation and efforts to safeguard the Business Potential and economic stability are crucial, given the challenges related to macroeconomic stability, debt distress, and the country’s vulnerability to international shocks. The report stresses that inaction on gender inequities will leave all Papua New Guineans worse off, making it clear that addressing these issues is not only a social imperative but also an economic one for the benefit of the entire population.
Despite the positive economic outlook, PNG faces challenges such as difficulties in accessing foreign exchange, power and water supply disruptions, and issues in the banking sector. The country’s complex land tenure system and widespread insecurity continue to hinder public and private investment. Additionally, PNG is prone to international shocks, such as falling global commodity prices and the COVID-19 pandemic-related economic downturn, which have negatively impacted the economy. The lack of access to foreign exchange is identified as the most critical impediment to doing business in PNG. Furthermore, the business potential the country’s inflation forecast is retained at 5% for 2023 and 2024, indicating persistent inflationary pressures.
In conclusion, Papua New Guinea’s return to economic growth presents opportunities for the government to address gender inequalities and pursue policies that promote economic stability and inclusive growth. The country’s Business Potential recovery, driven by high commodity prices and the removal of COVID-19 restrictions, underscores the potential for sustained growth. However, challenges related to macroeconomic stability, access to foreign exchange, and persistent inflationary pressures require concerted efforts to safeguard economic stability and create equal economic opportunities for all Papua New Guineans. Addressing these challenges and pursuing gender equality is essential for delivering major economic benefits and ensuring the well-being of the entire population in PNG.
