PNG ENJOYS HEALTHY ECONOMY, STABILITY

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By Isaac Nicholas

PORT MORESBY, Papua New Guinea (The National, Sept. 20) - Papua New Guinea’s economic and financial situation is very healthy, Treasury Secretary Simon Tosali said yesterday.

Mr. Tosali said the economy was far better than it was in 2002, with Standards and Poors credit rating for PNG been upgraded to B+, after taking into account political stability and debt management.

"Credit rating of B+ has never been achieved in the past. This rating is very good for the country."

Tosali said a budget surplus of PGK1.2 billion [US$425.9 million] was expected for this year, which would form the basis of the supplementary budget, which the Government expects to hand down in next month’s session of Parliament. He said debt was continuing to decline from a high of 72 percent in 2002 to a low 39 percent this year.

The state of the economy presentation yesterday puts the total revenue and grants this year at PGK6.7 billion [US$2.3 billion], compared to nearly PGK3.3 billion in 2002, which is a substantial increase of 28.2 percent of GDP in 2002 to 35.9 percent in 2007.

Tosali said the increase in revenue was due largely to high prices in copper, oil and gold.

Growth in revenue was boosted by the commodity boom with copper leading the growth in revenue with a massive increase by 500 percent and oil by 300 percent since 2002.

Tosali said that last year, PGK1.9 billion came from mining and petroleum and this year the Government expected another PGK2.4 billion in revenue from this sector.

In 2002, revenue from mining and petroleum tax was a mere 7.9 percent of the budget. It now contributed 30.9 percent, a big increase in five years because of high world prices.

Tosali gave the glowing report card at Parliament’s State Function Room in a briefing organized for heads of departments and statutory bodies in an "orientation" program with the theme, "Informed leaders make good decisions".

Tosali said the big story was that domestic funds under the Public Investment Programme of the development budget which had increased from PGK236.8 million in 2006 to PGK509.1 million in 2007.

He said the challenge for the new Parliament was for macroeconomic and political stability, and to deliver the benefits to grassroots Papua New Guinea.

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