ANZ Asia-Pacific chief economist Glenn Maguire has told an investment and infrastructure summit in Port Moresby that the Papua New Guinea economy will face major challenges as growth soars.
Increasing interest rates in the United States and a slowdown in China’s growth are the two key risks for the global economy and PNG, Mr Maguire said.
He warned that PNG faces significant challenges as its economy grows between 20 and 22% next year, “probably be the fastest growth any emerging economy has recorded over the past 30-40 years”.
“It is going to be an outstanding achievement and a growth rate like that will certainly be attracting the attention of off-shore investors and those wanting to do business in Papua New Guinea.”
Mr Maguire said the PNG workforce had become highly skilled in the mining and energy extraction sector and those workers “will probably need to be re-skilled or growth transitioned to other sectors of the economy.”
He said there were problems and issues in financial markets as well.
“Perhaps there is too much liquidity in the markets at the moment and a shortage of dollar liquidity.”