By JASON SOM KAUT
CHEAPER goods and services are possible only if the current growth enjoyed by the economy is sustained for another five to 10 years.
This was stressed by Dr Gae Kauzi of the Bank of Papua New Guinea (BPNG) at the opening last Monday of the week-long provincial treasurers conference being held at Busamang, just outside of Lae.
Dr Kauzi was reacting to queries from the delegates as to why prices of goods and services were still high although there was so much news about the growth in the economy.
The economy had experienced relative stability and growth during past three years largely due to the high world commodity prices supported by prudent financial management.
But this has yet to trickle down to the little people, the delegates noted.
Replying to this, Dr Kauzi said: “Medium-term growth prospects were looking good but if commodity prices drop, the country could face tougher times.
“There needs to be consistent stability of 2% to 3% over period of five to 10 years for prices of goods and services to go down.”
Dr Kauzi was speaking during a presentation on “state of the economy” at the week-long treasurers’ conference at Busamang, just outside Lae last Monday.
He said some indicators that attested to the good economic period were increasing employment rate, low inflation and reduction in public debt amongst others.
“Government debt declined impressively from 72% in 2002, 39% of gross domestic product (GDP) last year and an expected 34.5% drop by the end of this year.”
Dr Kauzi said: “This year had seen a continuation of good economic growth with real GDP expected at 6.2%.”
Employment increased by 1.6% in 2005, and 7.3% from 2006 to June this year, with an expected 7% in the last quarter.
However, he warned that with a population growth of 2.7%, the economy needs to perform stronger.