BANK PREDICTS 7 PERCENT GROWTH IN PNG ECONOMY

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PORT MORESBY, Papua New Guinea (The National, Feb. 4, 2008) - The Papua New Guinea Central Bank is predicting that the PNG economy will grow by about 7 percent this year following 6.2 percent growth in 2007 and 2.6 percent in 2006.

In its monetary policy statement released last week, Bank of Papua New Guinea Governor Wilson Kamit said economic growth, the strongest in more than a decade, was broad-based with contributions coming from all sectors. The biggest contribution came from communications, building and construction and agriculture, forestry and fisheries, he said.

Mr. Wilson said real gross domestic product this year was projected to increase by 6.6 percent with increases of 4.6 percent and 4.7 percent next year and in 2010.

He said the economy was expected to grow at a lower rate in the medium term because of a natural decline in existing oil reserves, but a higher growth rate was likely if the gas project came on stream.

Wilson said the bank’s employment indicators showed that jobs within the private sector had risen by 11.7 percent in the 12 months to last September, mainly because of increased jobs in building and construction, wholesale and retail, transportation and other sectors.

Concern have been expressed in some quarters that government forecasts of the economy may not be entirely reliable because the National Statistical Office has failed to update national accounts data since 2002.

In its latest forecast, the Asian Development Bank said the PNG economy was projected to grow last year by 4.5 percent before easing to 3.5 percent this year due to lower commodity export prices.

Following its annual mission to PNG last year, the International Monetary Fund said real GDP in 2007 should be above 5 percent compared with 2.6 percent in 2006.

It said, "stronger annual growth of 7 to 8 percent is within reach, but would require more effective use of PNG’s mineral wealth."

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