This is one of the predictions handed down in Treasurer Charles Abel's 2019 Budget released this week.
Oil and gas will contribute 6.3% and mining 6% over the coming year.
The 2019 budget has been framed against a moderately strengthening world economic environment with a reasonable commodity price outlook, but with a more positive outlook for the PNG economy now projected to reach a real GDP growth rate of 4%. The theme of the 2019 budget is 'building a broader-based economy.
The BDO Budget Bulletin comments that in 2019, the PNG economy is expected to pick up, and the real GDP growth rate of 4% will reflect more buoyant domestic conditions fuelled by the recovery in the oil and gas sector and by the early works and services from large new mining and petroleum projects.
Inflation is projected to ease to around 5.4% as the economy stabilises after the APEC spending boost in the preceding year to move modestly higher to 5.5% in 2020 as the early works of the new mining and petroleum projects move into the early construction phase.
Increased mobilisation of resources including labour is expected to boost incomes and spending, increasing prices in that year.
The current account surplus is expected to be K21,062.5 million or 23.8% of GDP which is a 4.3% decline from the 2018 estimate.
The foreign exchange imbalance is expected to end in 2019 as a result of the government's large external borrowings in 2018 and 2019, increases in Mining and Petroleum Tax collections throughout the year, dividend inflows from state shares in mining and petroleum projects and the remittance of royalty and development levies from the PNG LNG project.
Contributions by sectors to economic growth in PNG are expected to be:
• Oil and gas 6.3%
• Mining and quarrying 6%
• Electricity, gas and air-conditioning 5%
• Information and communication 3.9%
• Wholesale and retail trade 3.8%
• Accommodation and food services 2.8%
• Administrative and support services 2.8%
• Financial and insurance activities 2.6%
• Real estate 1.4%
Overnight, the gold price was fixed at $1215.69 per ounce.
The WTI crude oil price was up overnight at $56.50 per barrel.
In softer commodities, cocoa increased $8 per tonne or 0.37% to $2166/t yesterday from the $2158 in the previous trading session, tradingeconomics.com reported. Historically, cocoa reached an all-time high of $4361.58/t in July of 1977 and a record low of $211/t in July of 1965.
Coffee decreased 2.75c per pound or 2.44% to 109.90c/lb yesterday from 112.65c/lb in the previous trading session, tradingeconomics.com reported. Historically, coffee reached an all-time high of 339.86c/lb in April of 1977 and a record low of 42.50c/lb in October of 2001.