24 Dec 2012

World Bank lowers PNG's growth forecast

5:06 am on 24 December 2012

The World Bank says it's predicting slower growth for Papua New Guinea compared to the past decade.

The Post Courier says the latest update by the Bank reports economic growth at eight per cent for 2012, down one per cent on last year, due to a weaker currency and commodity prices with low rural and government incomes.

The report predicts further marked slowing of growth in 2013 and 2014 with fewer new investments.

It says government spending on development commitments is likely to become more intense as it addresses child nutrition, maternal mortality, violence and literacy problems.

The World Bank says production from the liquified natural gas project, which is under construction, will contribute to growth but the non-mineral economy will slow and there will be less money to rural areas from cash crops.

It says PNG needs to reduce regulation costs, support the private sector and make sure public funds go into effective delivery of goods and services.