PNG growth rate inflated by quake recovery - economist

1:57 pm on 16 April 2019

While the Asian Development Bank expects an economic upturn in Papua New Guinea, a veteran economist has a different view.

The ADB said growth was set to hit 3.7 percent this year on the back of a surge in returns from the resource sector.

Foreign exchange was also more available, while a newly signed LNG project promised a boost in foreign investment, the bank said.

But PNG Economics' Paul Flanagan said the state of the economy was not so rosy.

Economist Paul Flanagan

Economist Paul Flanagan Photo: ANU

The underlying growth rate remains about 1.5 percent and recovery from a devastating earthquake in 2018 is the reason for an apparent lift in the economy, Mr Flanagan said.

"These are a mathematical rebound that you get whenever there is something such as an earthquake that undermines and takes production away for a period of time," he said.

"In the next year, you expect the production to have returned to the earlier trend level and so that comes through as quite a strong growth number when all that has happened is that you are still on your previous trend path and that path hasn't been keeping up with the population growth rates."

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