ASIATODAY.ID, PORT MORESBY — Papua New Guinea (PNG) is posting one of the strongest economic performances in the Pacific, yet its rapid growth is leaving many citizens behind.
According to the latest World Bank Economic Update, Turning Growth into Jobs, the country’s economy expanded by 5.6% in 2025, driven by higher gold production, stronger liquefied natural gas (LNG) exports, and exchange-rate reforms that have improved the broader business environment.
Despite these gains, formal employment has failed to keep pace with the country’s fast-growing population. Instead, most new entrants to the labor force continue to rely on subsistence farming and informal employment, exposing a widening gap between economic growth and job creation.
The World Bank describes this disconnect as one of Papua New Guinea’s most significant development challenges and warns that sustained economic expansion alone will not guarantee higher living standards without broader structural reforms.
“Papua New Guinea is at a critical moment. The economy is growing and the resource sector has major opportunities ahead. There is now a small window of opportunity to turn this momentum into better jobs and livelihoods for all Papua New Guineans,” said Han Fraeters, World Bank Division Director for Papua New Guinea, Solomon Islands, and Vanuatu.
Fraeters emphasized that the country can generate greater benefits from its natural resources by securing fairer returns, investing more aggressively in infrastructure and human capital, and creating a stronger environment for private-sector investment.
Turning Growth Into Jobs
The report outlines a three-pronged strategy to ensure economic growth translates into meaningful employment.
First, it calls for greater investment in infrastructure, education, healthcare, nutrition, and workforce skills to strengthen the foundations of long-term productivity.
Second, it recommends improving the business climate through stronger governance, regulatory certainty, and policies that encourage companies to expand and hire more workers.
Third, it urges Papua New Guinea to mobilize greater private investment while managing resource revenues more effectively to diversify the economy beyond mining and energy.
Agribusiness Offers the Biggest Opportunity
Among the sectors examined, agribusiness stands out as the country’s strongest opportunity for large-scale job creation.
The World Bank estimates that strengthening agricultural value chains could generate around 330,000 additional formal jobs over the next decade while reducing poverty by approximately five percentage points, potentially lifting nearly 500,000 Papua New Guineans out of poverty.
However, realizing this potential will require substantial improvements in transport networks, electricity supply, digital connectivity, and workforce capabilities across rural communities.
Persistent Barriers to Investment
While macroeconomic conditions have improved, investors continue to face significant obstacles.
The report identifies inadequate infrastructure, crime and insecurity, regulatory uncertainty, and limited access to finance as major constraints that increase business costs and discourage investment outside key urban centers such as Port Moresby and Lae.
Addressing these bottlenecks, the World Bank argues, will be essential to unlocking broader private-sector growth and creating sustainable employment opportunities.
Resource Boom Brings High Stakes
Looking ahead, major resource developments—including the Papua LNG and Wafi-Golpu projects—could reshape Papua New Guinea’s economic landscape over the coming decade.
Yet the World Bank cautions that these multi-billion-dollar projects will deliver lasting national benefits only if resource revenues are managed transparently and strategically, with greater investment directed toward infrastructure, education, healthcare, and industries capable of generating large-scale employment.
Without stronger governance and more inclusive economic policies, the report warns, impressive GDP growth alone will not be enough to improve living standards for Papua New Guinea’s rapidly expanding population.
A Defining Decade for Papua New Guinea
The World Bank’s latest assessment underscores a pivotal challenge facing Papua New Guinea: transforming strong resource-led economic growth into inclusive, job-rich development.
As the country prepares for a new wave of LNG and mining investments, policymakers face mounting pressure to ensure that future prosperity is measured not only by GDP growth, but by the number of quality jobs created, businesses expanded, and families lifted out of poverty. (AT Network)
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