Papua New Guinea’s economy has been hithard by the COVID-19 crisis due to weaker demand and lessfavorable terms of trade. Pandemic-related global andnational movement restrictions have weakened external anddomestic demand and affected commodity prices, which willlead to an economic contraction, wider financing gaps in theexternal and fiscal accounts, and higher unemployment andpoverty than previously anticipated in 2020. The authoritiesreacted swiftly to the emerging external shock by developinga package of emergency health and economic relief measures.While the focus of the authorities is currently on crisismitigation measures, they should also look beyond thecurrent year at a more robust and resilient recovery overthe medium term. In addition to the economic analysis, thereport contains additional sections dedicated to physicalinfrastructure development in PNG. The infrastructuresection suggests that the provision of more equitable accessto quality infrastructure will be crucial once the countrymoves to the recovery and resilience phase of COVID-19response. While improving the quality of infrastructure inPNG faces serious constraints, the country’s abundance ofnatural resources is a potential source for financing thework and government’s stated vision and strategy can providenecessary policy guidance.
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