25 Mar 2004

PNG government says it has overcome fiscal crisis

10:22 am on 25 March 2004

The Papua New Guinea Government says it has successfully navigated through a fiscal crisis and the economy is growing with strong prospects for the medium term.

The Finance Minister, Bart Philemon, says that after a relatively weak performance over recent years, early data shows the economy grew by well over two percent last year.

Mr Philemon has told a Madang university audience that the Somare-Maladina Government got through the fiscal crisis mainly by tight expenditure controls.

He says better than expected growth last year in the key sectors of agriculture, forestry and fisheries and mining and petroleum reflects higher commodity prices and to some extent increased production.

Mr Philemon says the Kina improved considerably last year against most major currencies, and the country's international reserves are rising.

Inflation dropped to just over 8 percent last year from almost 15 percent the year before and domestic interest rates, though high, have fallen.

Mr Philemon says there is much hard work ahead, however, particularly in overall governance and improved public finance management.