The non-resource sector is expected to remain strong supported by the spillover benefits from the resource sector and the 2022 Election related spending in the economy.
Treasurer Ian Ling-Stuckey in his budget speech said the growth in the non-resource sector is expected to increase in real terms by 3.5 per cent in 2022.
This is attributed to growth in the AFF sector supported by the strong growth in the BLS sector as the resumption of both the Porgera and Simberi gold mines is anticipated to have spill-over benefits to most of the BLS sectors.
He said that the resumption of the mines is expected to cushion the overall forex imbalances and assist the sector’s growth. The growth in the Mining and Quarrying sector is projected to rebound and grow strongly by 35.8 per cent in 2022.
The strong rebound in growth for the sector reflects the resumption of the Porgera mine expected in the second quarter of 2022, since the shutdown in April 2020.
In addition, production from the Ok Tedi mine is expected to increase due to better access to high-grade ores, while the Lihir mine is expecting its production to return to normal following the disruptions encountered in 2021.
Meantime, the Oil and Gas sector is projected to contract by 0.9 per cent in 2022.
This is due to a downgrade in condensate production and is mainly associated with the production systems.
Despite the contraction in the sector, the projected strong growth in the Mining and Quarrying sector is expected to offset the decline in the Oil and Gas segment.