Papua New Guinea’s central bank has inched up its 2025 GDP forecast, citing stronger commodity prices, steadier mine output and improved agricultural exports. In a preliminary September outlook presented to the Monetary Policy Committee on 3 September, the Bank of Papua New Guinea said it had revised growth slightly upward from the 4.1 per cent projected in March. “This improvement reflects stronger than expected performance in both the mineral and non-mineral sectors, supported by favourable global commodity prices,” the report stated.
The bank sees mineral-sector momentum from output improvements at existing mines and from upgrades to production infrastructure. Coffee, palm oil and cocoa lead non-mineral growth amid firmer international prices. BPNG also points to macro undercurrents that support activity, including reduced import turnaround times, more reliable fuel supply and a foreign exchange market that has loosened as inflows rise. It now expects medium-term growth above 4 per cent, underpinned by the construction phase of the Papua LNG project and broader expansion in primary and services industries. It also flags risks from global tariffs, commodity swings, disasters and project delays. Source: Post-Courier.
The revision comes alongside separate BPNG data showing that the foreign exchange market has improved since March. Inflows from end March to 21 August rose from K12.3 billion to K13.7 billion, while outstanding foreign exchange orders fell from K651.5 million in February to K308.1 million by August. Notably, interbank foreign exchange trading, dormant since 2013, has re-emerged as some authorised dealers accumulated surpluses. Central bank interventions have fallen thanks to stronger commercial flows. “This increase was largely driven by higher international commodity prices in both the mining and agricultural sectors,” BPNG said.
The bank continues to run a crawl-like exchange-rate regime to support export competitiveness and to moderate import demand. If those settings are sustained alongside project execution, they strengthen the case for a cautiously brighter 2025 outlook.
