Overvalued kina blamed for lack of sustainable growth in PNG

8:23 am on 12 August 2019
PNG Kina

Photo: RNZ Pacific/ Koroi Hawkins

An economist has blamed an overvalued currency for holding Papua New Guinea back from sustainable economic growth.

Stephen Howes, the Director of the Australian National University's Development Policy Centre, made the comment at the PNG Update conference in Port Moresby.

He said it was important for PNG to diversify and move away from an economy heavily dependent on the resource sector.

PNG is one of the top ten resource-dependent economies in the world.

Professor Howes said for PNG's economy to be diverse, it needs to be more competitive.

"And to be more competitive it can't have such a strong exchange rate. At the moment, the kina is over-valued, and that's holding back the diversification of the economy, and therefore reducing the chances for sustainable growth." he said.

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