Papua New Guinea Economy

June 29, 2010Papua New Guineaby EconomyWatch

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Papua New Guinea's economy is dependent on agriculture. A majority of Papua New Guinea's population is dependent on agriculture. More than 70 percent of the country's exports are mineral deposits like oil, gold, and copper. World Bank aid and support from Australia help in maintaining Papua New Guinea's economy.

Papua New Guinea GDP

In 2007, Papua New Guinea's GDP stood at around $12.05 billion. That was a 6 percent growth over previous year GDP figure of Papua New Guinea. GDP per capita was estimated to be around $2,100 in 2007. Sector-wise breakup of Papua New Guinea's GDP shows that dependence on agriculture is almost as much as on industry.

Inflation

In 2007, inflation in Papua New Guinea was nearly 1 percent. Low inflation rate is actually a reflection of decreased economic activity in Papua New Guinea. In 1998, inflation was as high as 21 percent.

Imports and exports

In 2007, import figures for Papua New Guinea stood at $2.629 billion. Commodities like machinery, transport equipment, food, fuels, manufactured goods, and chemicals, were imported to Papua New Guinea. Australia accounted for nearly 50 percent of the country's imports followed Singapore, China, and Japan.

In 2007, Papua New Guinea's total exports were worth more than $4.5 billion. Oil, copper ore, gold, palm oil, coffee, cocoa, prawns, and logs. Australia accounted for about 25 percent of Papua New Guinea's exports. Japan and China are also two important export partners for Papua New Guinea.

Weaknesses

Though Papua New Guinea is blessed with natural resources, exploitation has always been a challenging prospect. High infrastructure costs and rugged terrain have made it difficult for Papua New Guinea to exploit natural resources to full potential. Human trafficking is another major problem encountered by Papua New Guinea.

Future of Papua New Guinea

A lot depends on Papua New Guinea's relations with its former colonial ruler, Australia. Aid provided by Australia accounts for more than 20 percent of Papua New Guinea's budget.

 

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