page_title: Papua New Guinea
section_title: Economy
hierarchical_section_title: Papua New Guinea / Economy
caption_attribution_description: English: Pacific Place Port Moresby November 2013
context_page_description: Papua New Guinea, officially the Independent State of Papua New Guinea, is a sovereign state in Oceania that occupies the eastern half of the island of New Guinea and its offshore islands in Melanesia, a region of the southwestern Pacific Ocean north of Australia. Its capital, located along its southeastern coast, is Port Moresby. The western half of New Guinea forms the Indonesian provinces of Papua and West Papua. It is the world's third largest island country with 462,840 km².
  Papua New Guinea became a colony of Germany and the United Kingdom at the end of the 19th century and was then administered by Australia until 1975 when Papua New Guinea became a sovereign state. It is an independent Commonwealth realm with Elizabeth II as its queen, and is a member of the Commonwealth of Nations.
  Papua New Guinea is one of the most culturally diverse countries in the world. As of 2019, it is also the most rural, as only 13.25% of its people live in urban centres. There are 840 known living languages in the country. Most of the population of more than 8 million people lives in customary communities, which are as diverse as the languages.
context_section_description: Papua New Guinea is richly endowed with natural resources, including mineral and renewable resources, such as forests, marine (including a large portion of the world's major tuna stocks), and in some parts agriculture. The rugged terrain—including high mountain ranges and valleys, swamps and islands—and high cost of developing infrastructure, combined with other factors (including serious law and order problems in some centres and the system of customary land title) makes it difficult for outside developers. Local developers are handicapped by years of deficient investment in education, health, ICT and access to finance. Agriculture, for subsistence and cash crops, provides a livelihood for 85% of the population and continues to provide some 30% of GDP. Mineral deposits, including gold, oil, and copper, account for 72% of export earnings. Oil palm production has grown steadily over recent years (largely from estates and with extensive outgrower output), with palm oil now the main agricultural export. In households participating, coffee remains the major export crop (produced largely in the Highlands provinces); followed by cocoa and coconut oil/copra from the coastal areas, each largely produced by smallholders; tea, produced on estates; and rubber. The Iagifu/Hedinia Field was discovered in 1986 in the Papuan fold and thrust belt.
  Former Prime Minister Sir Mekere Morauta tried to restore integrity to state institutions, stabilise the kina, restore stability to the national budget, privatise public enterprises where appropriate, and ensure ongoing peace on Bougainville following the 1997 agreement which ended Bougainville's secessionist unrest. The Morauta government had considerable success in attracting international support, specifically gaining the backing of the International Monetary Fund (IMF) and the World Bank in securing development assistance loans. Significant challenges face Prime Minister Sir Michael Somare, including gaining further investor confidence, continuing efforts to privatise government assets, and maintaining the support of members of Parliament.
  In March 2006, the United Nations Development Programme Policy called for Papua New Guinea's designation of developing country to be downgraded to least-developed country because of protracted economic and social stagnation. However, an evaluation by the IMF in late 2008 found that "a combination of prudent fiscal and monetary policies, and high global prices for mineral commodity exports, have underpinned Papua New Guinea's recent buoyant economic growth and macroeconomic stability. By 2012 PNG had enjoyed a decade of positive economic growth, at over 6% since 2007, even during the Global Financial Crisis years of 2008/9. PNG's Real GDP growth rate as at 2011 was 8.9%," and 9.2% for 2012, according to the Asian Development Bank. As of 2019, PNG's real GDP growth rate has dropped to 3.8%, along with an inflation rate of 4.3%
  This economic growth has been primarily attributed to strong commodity prices, particularly mineral but also agricultural, with the high demand for mineral products largely sustained even during the crisis by the buoyant Asian markets, a booming mining sector and by a buoyant outlook and the construction phase for natural gas exploration, production, and exportation in liquefied form (liquefied natural gas or "LNG") by LNG tankers (LNG carrier), all of which will require multibillion-dollar investments (exploration, production wells, pipelines, storage, liquefaction plants, port terminals, LNG tanker ships).
  The first major gas project was the PNG LNG joint venture. ExxonMobil is operator of the joint venture, also comprising PNG company Oil Search, Santos, Kumul Petroleum Holdings (Papua New Guinea's national oil and gas company), JX Nippon Oil and Gas Exploration, the PNG government's Mineral Resources Development Company and Petromin PNG Holdings. The project is an integrated development that includes gas production and processing facilities in the Hela, Southern Highlands and Western Provinces of Papua New Guinea, including lique
caption: Port Moresby's central business district