Economy - overview:
Papua New Guinea is richly endowed with natural resources, but exploitation has been hampered by rugged terrain and the high cost of developing infrastructure. Agriculture provides a subsistence livelihood for 75% of the population. Mineral deposits, including copper, gold, and oil, account for nearly two-thirds of export earnings. The government of Prime Minister SOMARE has expended much of its energy remaining in power. He was the first prime minister ever to serve a full five-year term. The government also brought stability to the national budget, largely through expenditure control; however, it relaxed spending constraints in 2006 and 2007 as elections approached. Numerous challenges still face the government including regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and balancing relations with Australia, its former colonial ruler. Other socio-cultural challenges could upend the economy including a worsening HIV/AIDS epidemic, currently the highest rate in all of East Asia and the Pacific, and chronic law and order and land tenure issues. Australia supplied more than $300 million in aid in FY07/08, which accounts for nearly 20% of the national budget. A consortium led by a major American oil company hopes to begin the commercialization of the country's estimated 637 billion cubic meters of natural gas reserves through the construction of a liquefied natural gas (LNG) production facility by 2010. The project has the potential to double the GDP of Papua New Guinea.

GDP (purchasing power parity):
$13.29 billion (2008 est.)
$12.5 billion (2007)
$11.79 billion (2006)
note: data are in 2008 US dollars

GDP (official exchange rate):
$6.363 billion (2008 est.)

GDP - real growth rate:
6.3% (2008 est.)
6% (2007 est.)
2.6% (2006 est.)

GDP - per capita (PPP):
$2,200 (2008 est.)
$2,200 (2007 est.)
$2,100 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector:
agriculture: 32.8%
industry: 36.5%
services: 30.6% (2008 est.)

Labor force:
3.639 million (2008 est.)

Labor force - by occupation:
agriculture: 75%
industry: NA%
services: NA% (2005 est.)

Unemployment rate:
1.9% up to 80% in urban areas (2004)

Household income or consumption by percentage share:
lowest 10%: 1.7%
highest 10%: 40.5% (1996)

Distribution of family income - Gini index:
50.9 (1996)

Investment (gross fixed):
19.9% of GDP (2008 est.)

Budget:
revenues: $3.098 billion
expenditures: $2.949 billion (2008 est.)

Public debt:
34% of GDP (2008 est.)

Inflation rate (consumer prices):
8.8% (2008 est.)

Central bank discount rate:
7.38% (31 December 2007)

Commercial bank prime lending rate:
9.78% (31 December 2007)

Stock of money:
$1.685 billion (31 December 2007)

Stock of quasi money:
$1.482 billion (31 December 2007)

Stock of domestic credit:
$1.486 billion (31 December 2007)

Market value of publicly traded shares:
$4.863 billion (2005)

Agriculture - products:
coffee, cocoa, copra, palm kernels, tea, sugar, rubber, sweet potatoes, fruit, vegetables, vanilla; shell fish, poultry, pork

Industries:
copra crushing, palm oil processing, plywood production, wood chip production; mining of gold, silver, and copper; crude oil production, petroleum refining; construction, tourism

Industrial production growth rate:
6.3% (2008 est.)

Electricity - production:
2.875 billion kWh (2006 est.)

Electricity - consumption:
2.674 billion kWh (2006 est.)

Electricity - exports:
0 kWh (2007 est.)

Electricity - imports:
0 kWh (2007 est.)

Oil - production:
42,100 bbl/day (2008 est.)

Oil - consumption:
29,050 bbl/day (2006 est.)

Oil - exports:
39,310 bbl/day (2005)

Oil - imports:
24,150 bbl/day (2005)

Oil - proved reserves:
88 million bbl (1 January 2008 est.)

Natural gas - production:
140 million cu m (2006 est.)

Natural gas - consumption:
140 million cu m (2006 est.)

Natural gas - exports:
0 cu m (2007 est.)

Natural gas - imports:
0 cu m (2007 est.)

Natural gas - proved reserves:
226.5 billion cu m (1 January 2008 est.)

Current account balance:
$438 million (2008 est.)

Exports:
$5.658 billion f.o.b. (2008 est.)

Exports - commodities:
oil, gold, copper ore, logs, palm oil, coffee, cocoa, crayfish, prawns

Exports - partners:
Australia 27.3%, Japan 9.5%, China 5.7% (2007)

Imports:
$3.013 billion f.o.b. (2008 est.)

Imports - commodities:
machinery and transport equipment, manufactured goods, food, fuels, chemicals

Imports - partners:
Australia 51.3%, Singapore 11.6%, China 7.9%, Japan 5.7% (2007)

Reserves of foreign exchange and gold:
$2.548 billion (31 December 2008 est.)

Debt - external:
$1.582 billion (31 December 2008 est.)

Stock of direct foreign investment - at home:
$NA

Stock of direct foreign investment - abroad:
$NA

Exchange rates:
kina (PGK) per US dollar - 2.6956 (2008 est.), 3.03 (2007), 3.0643 (2006), 3.08 (2005), 3.2225 (2004)