Papua New Guinea is forecasting a significant economic contraction this year, caused by the coronavirus pandemic.
Downtown Port Moresby, Papua New Guinea. Photo: RNZ / Johnny Blades
The World Bank says GDP will shrink by 1-point-3 percent, and the fiscal deficit will reach 6-point-4 percent of GDP.
The bank's economist for PNG, Ilyas Sarsenov, said plummeting commodity prices and low government revenue would fuel the problems.
He said the government would have to spend to help the recovery - and it could be an opportune time to invest in desperately needed rural and health infrastructure.
"Access to roads allows people to reach schools markets and jobs," Mr Sarsenov explained.
"Access to safe water and sanitation helps limit the incidents of water borne diseases.
"So by building and maintaining appropritate infrastructure, Papua New Guinea can work towards better living standards."
Ilyas Sarsenov said while the economic hit to PNG was severe, it had been cushioned by its small tourism industry and Australia's relatively low number of Covid cases.
