Big contraction forecast for PNG economy

Port Moresby: Papua New Guinea is forecasting a significant economic contraction this year, caused by the coronavirus pandemic.

The World Bank says GDP will shrink by 1.3 per cent, and the fiscal deficit will reach 6.4 per cent of GDP.

The bank’s economist for PNG, Ilyas Sarsenov, said plummeting commodity prices and low government revenue would fuel the problems.

He said the government would have to spend to help the recovery - and it could be an opportune time to invest in desperately needed rural and health infrastructure. “Access to roads allows people to reach schools markets and jobs,” Mr Sarsenov explained.

“Access to safe water and sanitation helps limit the incidents of water borne diseases.”