Country Diagnostics Studies: Papua New Guinea Critical Developments Constraints

Papua New Guinea’s economic growth has outpaced the majority of economies in Southeast Asia and the Pacific since 2007. Its development challenges, however, remain daunting, and it lags behind other countries in the region in terms of per capita income and achievement of the Millennium Development Goals. This raises the question of how the country can make its economic growth high, sustained, inclusive, and broad-based to more effectively improve its population’s welfare. This report identifies the critical constraints to these objectives and discusses policy options to help overcome such constraints. The 2009 PPP Update provides an intermediate benchmark and more firmly based real expenditures and price level indexes for 2009 than would have been possible using the conventional extrapolation technique. The results include PPP-based gross domestic product and its major aggregates of actual final consumption; collective consumption expenditure by general government; gross fixed capital formation; changes in inventories and net acquisitions of valuables; and balance of exports and imports.