In a recent business meeting in Lae, Papua New Guinea, Westpac economist Justin Smirk highlighted six key challenges hampering Papua New Guinea’s economy and businesses. These issues include a shortage of expertise and skills, foreign exchange concerns, security issues, unreliable utilities, lack of government capacity, and regulatory uncertainty. Smirk said addressing these challenges would greatly benefit the country’s economy.
Despite these obstacles, Smirk expressed confidence in the resilience of Papua New Guinea businesses, noting their ability to navigate difficulties such as the recent fuel crisis by sourcing supplies from overseas. As the newly-appointed director for Westpac Economics in the region, Smirk looks forward to establishing an economics team for Westpac PNG.
Meanwhile, Papua New Guinea experienced slower-than-anticipated economic growth in 2023 at 2.7 per cent, but it is expected to accelerate to 5.3 per cent in 2024. According to Credit Corporation CEO Danny Robinson, this growth projection is fuelled by improving output in the nation’s resources sector and a significant pipeline of government capital projects.
The Credit Corporation Group’s performance for the 2023 financial year was robust, with expectations of further growth in 2024, bolstered by the reopening of the Porgera gold mine and the construction of other major resource projects.
In the wider Pacific region, key players like Fiji, Solomon Islands, and Vanuatu are also experiencing varying degrees of economic growth and recovery. Fiji’s economic growth is forecast at 3.92 per cent, driven by a strong recovery in tourism despite weaknesses in other sectors. The Solomon Islands economy is expected to grow by 2.43 per cent in 2024, supported by benefits from the 2023 Pacific Games and national elections. Vanuatu, rebounding from cyclone damage in 2023, anticipates a 2.64 per cent growth in real GDP, primarily due to an anticipated increase in visitor arrivals.
The financial outlook for the Pacific islands underscores both the challenges and opportunities facing these economies as they navigate recovery and growth trajectories in the post-pandemic landscape.
