PNG BANK SEES STRONG ECONOMY AHEAD

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4 to 8 percent GDP growth forecast

By Harlyne Joku PORT MORESBY, Papua New Guinea (PNG Post-Courier, Sept. 20, 2010) – The prospect for growth in Papua New Guinea’s (PNG) economy looks good, according to the Bank of PNG’s head of the research department Gae Kauzi.

Mr. Kauzi said the Bank of PNG’s projection puts real GDP (Gross Domestic Product) growth in the range of 4 to 8 per cent in the next three years.

Mr. Kauzi made the remark during the launch of NRI (National Research Institute)’s report on PNG’s Development Performance over the past 35 years to coincide with the independence celebrations last Wednesday.

Mr. Kauzi explained that since the Bank of PNG (Central Bank) was given more independence and power in the conduct in the 2000’s of monetary policy (supply and demand of Money), the bank has contributed positively to the economic stability of PNG, independent of political interference.

"With the increased independence of the Bank of PNG enabled by the legislative reforms of 2000, monetary policy has been able to concentrate on its core objective of achieving price stability through sound liquidity management and with a stable exchange rate," Mr. Kauzi said.

He said the stability from 2000 onwards was also driven by high commodity prices and significant growth in international reserves.

"Together with discipline in fiscal management (government’s use of revenue, expenditure and debt management) there were relative stability in prices after 2003 and business confidence was very high."

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