BSP CEO Forecasts Positive Economic Growth & Employment Outlook for PNG in 2024

The Group CEO of BSP Financial Group Limited, Mark Robinson, says PNG has a lot of upside potential for economic growth and employment in 2024 Robinson revealed this in BSP's 'Pacific Economic and Market Insights' December 2023 Quarter report.

"The country has a lot of upside potential for economic growth and employment, with the slate of resource projects and scale of government investment in the near term; however, maintaining investor confidence is key to maximizing economic benefit from growth.

"The IMF and PNG Department of Treasury also anticipate strong growth in 2024, with the PNG economy growing at 5.0% and 5.3%, respectively. This positive outlook is mirrored in the government's K27.4 billion budget for 2024, with 68% of the expenditure being supported by an expected solid increase in tax revenue.

Robinson notes that the K2.0 billion increase in government expenditure for 2024 was generally well received and fundamental for stimulating economic activity. He added that translating that level of government spending on a micro level into tangible outcomes like new jobs, improved utility and health services, and greater public safety is key to maintaining public and investor confidence.

In the resource sector, Robinson emphasized the reopening of the Porgera Gold Mine and its operations in the first quarter of 2024 as crucial for fueling Papua New Guinea's resource sector activity and revenue prospects for the year.

He, however, revealed that FX shortages are still expected, particularly in the non-resource sector. "FX shortages are still expected to be a key drag on growth. In addition, the sequenced depreciation of the PGK will further exacerbate business costs, as it will mean increased import cost as well as debt servicing.

"In addition to the above, there is still a lot of uncertainty in the global economy given tensions in the Middle East, the Russian/Ukraine war, and El Nino weather patterns.

These factors also present downside risks to PNG’s economic outlook. "On a positive note, the slate of resource projects over the short-medium term suggests PNG is about to enter a super-cycle of economic growth.

Papua LNG’s FID is expected to be signed in 2024, and Wafi-Golpu could potentially follow suit, and P’nyang is expected to commence in 2028.

"Robinson notes that the commencement of these resource projects will greatly boost investor confidence, present significant employment opportunities, and local content for our business customers.

Photo Credit: BSP Financial Group Limited