Papua New Guinea Economy 2008

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 85% 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 and chronic law and order and land tenure issues. Australia will supply more than $300 million in aid in FY07/08, which accounts for nearly 20% of the national budget.

GDP (purchasing power parity):
$16.56 billion (2007 est.)

GDP (official exchange rate):
$4.438 billion (2007 est.)

GDP - real growth rate:
4% (2007 est.)

GDP - per capita (PPP):
$2,900 (2007 est.)

GDP - composition by sector:
agriculture: 35.5%
industry: 37%
services: 27.5% (2007 est.)

Labor force:
3.557 million (2007 est.)

Labor force - by occupation:
agriculture: 85%
industry: NA%
services: NA%

Unemployment rate:
3,419.3% up to 80% in urban areas (2004)

Population below poverty line:
37% (2002 est.)

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):
1.8% (2007 est.)

Investment (gross fixed):
20.4% of GDP (2007 est.)

Budget:
revenues: $2.209 billion
expenditures: $1.994 billion (2007 est.)

Public debt:
43.7% of GDP (2007 est.)

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

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:
4.8% (2007 est.)

Electricity - production:
3.698 billion kWh (2005)

Electricity - consumption:
3.439 billion kWh (2005)

Electricity - exports:
0 kWh (2005)

Electricity - imports:
0 kWh (2005)

Oil - production:
50,000 bbl/day (January 2006 est.)

Oil - consumption:
26,000 bbl/day (2005 est.)

Oil - exports:
44,580 bbl/day (2004)

Oil - imports:
24,020 bbl/day (2004)

Oil - proved reserves:
240 million bbl (1 January 2006 est.)

natural gas - production:
95.91 million cu m (2005 est.)

natural gas - consumption:
95.91 million cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
0 cu m (2005)

natural gas - proved reserves:
331.3 billion cu m (1 January 2006 est.)

Current account balance:
$314 million (2007 est.)

Exports:
$4.553 billion f.o.b. (2007 est.)

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

Exports - partners:
Australia 30.2%, Japan 8.2%, China 5.7% (2006)

Imports:
$2.269 billion f.o.b. (2007 est.)

Imports - partners:
Australia 52%, Singapore 12.6%, China 5.9%, Japan 4.3% (2006)

Economic aid - recipient:
$266.1 million (2005)

Reserves of foreign exchange and gold:
$1.664 billion (31 December 2007 est.)

Debt - external:
$1.814 billion (31 December 2007 est.)

Stock of direct foreign investment - at home:
$NA

Stock of direct foreign investment - abroad:
$NA

Market value of publicly traded shares:
$4.863 billion (2005)

Currency (code):
kina (PGK)

Exchange rates:
kina per US dollar - 3.03 (2007), 3.0643 (2006), 3.08 (2005), 3.2225 (2004), 3.5635 (2003)