By HARLYNE JOKU
THE country’s economy is growing at a strongest rate in over a decade, reflecting business confidence, higher employment growth, stronger investment and higher profits for business.
This was indicated in the 2008 Budget speech of Treasury Minister Patrick Pruaitch yesterday.
Real gross domestic product (GDP) growth had increased from negative 0.2% in 2002 to an average 2.7% over the past years.
Real GDP growth was expected to be 6.2% this year and 6.6% next year.
“If realised, this would represent the strongest two years of consecutive economic growth in the last 15 years,” Mr Pruaitch said.
Secretary Simon Tosali said during the budget lock up that strong growth in the communication sector was a result of competition and impressive expansion of the mobile phone segment of the market which provided social and economic benefits across the nation.
He added the kina had regained its value against other international currencies and was now worth US$0.35 compared to US$0.29 US in 2002.
The other positive signs::
lInterest rates (treasury bills) dropped from a high of over 13.5% in 2002 to 3.3% last year;
lThe Central Bank’s kina facility rate (KFR) declined from 13.5% in 2002 to only 6% now;
lGovernment’s budget position had turned around from a deficit of K450 million (3.9% of GDP) in 2002 to a budget surplus of K536 million last year (3.1% of GDP) and;
lForeign exchange reserves had gone beyond US$2 billion (equivalent to K6 billion) early this month, a level never experienced in this country before.
Mr Pruaitch said the improved economic growth stems from a combination of positive international developments, improved political stability and prudent macroeconomic policies.