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Predicts 6 percent growth next year

PORT MORESBY, Papua New Guinea (PNG Post-Courier, March 10, 2008) - Australian Prime Minister Kevin Rudd has been impressed by the economic performance of Papua New Guinea during his three-day visit to the country.

He told business executives in Port Moresby that the gross domestic product (GDP) was tipped to grow beyond 6 percent compared to a GDP growth of just above 5 percent last year.

Mr. Rudd was speaking at a breakfast co-hosted by the PNG-Australia Business Council and the Business Council of Papua New Guinea. "That means the PNG economy is now worth around US$6 billion [PGK16 billion] -- that is an impressive figure in a region where many countries measure their GDP in the hundreds of millions of dollars or less," Rudd said. "Debt levels have been brought down.

The Government has kept the budget is in surplus and the current account is running a surplus. This country is growing. And it is already the leader in the region -- accounting for around three-quarters of the region’s total population. "I am pleased to say that trade and investment between our two countries continues to grow." Merchandise trade between Australia and PNG was worth almost US$4 billion [PGK11 billion] last year and the trade balance is in PNG’s favor.

Rudd said there were growing opportunities for investment particularly in the resources sector, building on the 4,000 individual Australian businesses that trade with PNG each year. "But PNG also has some challenges ahead of it. Progress has been mixed against the United Nations Millennium Development Goals that set targets to reduce poverty, improve health and ensure universal primary education," he said. He said one of the major challenges for the country was the rate of HIV/AIDS which according to AusAID projections would infect up to 500,000 people by 2025.

He also said that the private sector would play a major role in the renewed relationship that PNG and Australia had established with his visit to PNG. Mr Rudd said the Forest Carbon Partnership signed in Port Moresby on Thursday had a real connection to the business community.

"For instance, our work on forest carbon has the potential to generate substantial investment flows into PNG. International businesses seeking to offset emissions increasingly will be looking for credible and verifiable emissions credits, including from forests." he said. "We look forward to engaging with business as part of our cooperation with PNG on forest carbon. The Pacific Partnerships for Development are also closely linked to business. Enhancing private sector development, including through better access to microfinance and helping build better infrastructure are key areas under the Partnerships -- areas that are crucial for broad-based, sustainable economic growth."

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