BOOMING PNG ECONOMY TO GROW BY EIGHT PERCENT

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But inflation expected to hit low-wage earners

MELBOURNE, Australia (Radio Australia, May 23, 2011) - Papua New Guinea's (PNG) Treasurer Peter O'Neil says the nation's economy is expected to grow by eight percent this year.

Mr. O'Neil says the positive economic outlook is fuelled by a boom in the mining and petroleum sectors.

He says the main economic driving force is the multi-billion dollar PNG Liquefied Natural Gas (LNG) project.

[PIR editor’s note: A separate report says gas from the project is expected to be ready for overseas markets by 2014.]

"The real GDP growth is expected to be around 8 per cent largely driven by the expected ramping up of the PNG Liquefied Natural gas LNG project activity," Mr. O'Neil said.

But he has warned that there is also going to be high inflation which will hit low income earners hard, as prices of goods and services increase.

"Inflation remains persistent and is threatening the macro-economic stability. Our forecast for inflation for 2011 is 8.2 percent," Mr. O'Neil said.

The treasurer says the government will do its best to control and minimize the impacts of a high inflation rate on ordinary people and businesses.

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