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Economy
2003/11/24

 Economy - overview: Papua New Guinea is richly endowed with natural resources, but exploitation has been hampered by the rugged terrain and the high cost of developing infrastructure. Agriculture provides a subsistence livelihood for the bulk of the population. Mineral deposits, including oil, copper, and gold, account for 72% of export earnings. Budgetary support from Australia and development aid under World Bank auspices have helped sustain the economy. In 1995, Port Moresby reached agreement with the IMF and World Bank on a structural adjustment program, of which the first phase was successfully completed in 1996. In 1997, droughts caused by the El Nino weather pattern wreaked havoc on Papua New Guinea's coffee, cocoa, and coconut production, the mainstays of the agricultural-based economy and major sources of export earnings. The coffee crop was slashed by up to 50% in 1997. Despite problems with drought, the year 1998 saw a small recovery in GDP. Growth increased to 3.6% in 1999 and may be even higher in 2000, say 4.3%.

GDP: purchasing power parity - $11.6 billion (1999 est.)

GDP - real growth rate: 3.6% (1999 est.)

GDP - per capita: purchasing power parity - $2,500 (1999 est.)

GDP - composition by sector:

agriculture: 25%

industry: 35%

services: 40% (1999 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:

lowest 10%: 1.7%

highest 10%: 40.5% (1996)

Inflation rate (consumer prices): 16.5% (1999 est.)

Labor force: 1.941 million

Labor force - by occupation: agriculture NA%, industry NA%, services NA%

Unemployment rate: NA%

Budget:

revenues: $1.6 billion

expenditures: $1.9 billion, including capital expenditures of $NA (1998 est.)

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

Industrial production growth rate: NA%

Electricity - production: 1.74 billion kWh (1998)

Electricity - production by source:

fossil fuel: 69.54%

hydro: 30.46%

nuclear: 0%

other: 0% (1998)

Electricity - consumption: 1.618 billion kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: coffee, cocoa, coconuts, palm kernels, tea, rubber, sweet potatoes, fruit, vegetables; poultry, pork

Exports: $1.9 billion (f.o.b., 1999 est.)

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

Exports - partners: Australia 20%, Japan 13%, Germany 7%, South Korea 5%, Philippines 4%, UK 3% (1998)

Imports: $1 billion (f.o.b., 1999 est.)

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

Imports - partners: Australia 51%, Singapore 10%, Japan 8%, US 5%, New Zealand 5%, Malaysia 3% (1998)

Debt - external: $2.4 billion (1999 est.)

Economic aid - recipient: $400 million (1999 est.)

Currency: 1 kina (K) = 100 toea

Exchange rates: kina (K) per US$1 - 2.7624 (November 1999), 2.520 (1999), 2.058 (1998), 1.434 (1997), 1.318 (1996), 1.276 (1995)

Fiscal year: calendar year

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