PNG Economy – Forecasting Confusion Undermines Confidence but RECESSION CONFIRMED
by P AUL FLANAGAN Executive Summary The 2017 Budget was a missed opportunity for restoring credibility in the Government’s economic management. Vastly different measures for GDP are included throughout the same Budget document – not a good look for international investors and credit rating agencies LNG values are assumed to increase in the 2017 Budget by 16% while recent World Bank forecasts indicate a fall of 35%. Using official BPNG figures, and updating them for the lower growth forecasts in the 2017 budget, a recession is confirmed: (using the measure most relevant for measuring progress on PNG’s living standards) real non-resource GDP per capita is expected to fall from K2,479 in 2013 to K2,282 in 201 7 this is a fall of 8% in average living standards in PNG. According to official estimates from Treasury and BPNG, it will now take until past 2023 to get back to 2013 standards of living (see graph below). PNG is officially facing another lost decad