Economist: Economy Will Be Weak in 2021
An economist said that in light of the pandemic, the economy will come off as weak next year.
According to Westpac senior economist Justin Smirk, “We expect that there will be weak economic growth in 2021 following the after-shock and recovery of the Covid-19 on businesses and the economy with mining output also expected to be low. The medium-term recovery will be driven by non-resource sectors such as agriculture, fisheries and forestry, dependent on the return to production of Porgera mine.”
However, Prime Minister James Marape said recently that a budget analysis done by an accounting firm said that the economy is set to rebound at 3.5 per cent next year. This is due to the recovery across most industries and improved global demand and consumption.
“This will see growth rise to an estimated 10.6 per cent in nominal terms (which is an increase from an initial 7.4 per cent forecast in the 2021 Budget strategy paper) totalling K90.3 billion and is expected to increase in 2022 to reach an estimated growth at K99.4 billion,” Marape said. “The forecast increase of 10 per cent per annum in both 2021 and 2022 is the highest in PNG’s history and is larger than the growth from 2013 to 2015 when the PNG LNG project commenced production. Economic growth is projected to grow at a steady annual growth rate of 3.1 per cent over the medium term, in line with an estimated 3.7 per cent growth in the non-mining sector.”
Marape said these figures represent a vote of confidence for the policies and programmes of the government.