26 Nov 2010

PNG's economy grew by an estimated 5-point-5 percent

10:53 am on 26 November 2010

Papua New Guinea's economy grew by an estimated 5.5 per cent last year and is expected to grow 7.1 per cent this year.

The newspaper, The National, reports that according to the Deloitte Touche 2011 budget alert, the economy was able to weather the global recession reasonably well.

It says the financial sector remained resilient due to relatively low exposure to overseas financial instruments and a strong domestic funding base.

However, the most heavily affected sectors were agriculture, forestry, fisheries and the manufacturing sectors due to declining overseas demand.

The newspaper says the 2011 budget can be described as a steady as she goes budget, which builds on planning done in previous years and takes advantage of the increased revenue stream expected to be available next year.

The government set out what it saw as a number of risks to the fiscal and economic outlook on which the budget is framed.

These include the fragility of the global economy in terms of its impact on PNG exports and commodity prices, delays to the LNG and other resource projects, and the government diverting from fiscal discipline and adding to already strong inflationary pressures.