20 Feb 2007

PNG government worried drop in prices for copper and oil may upset budget planning

10:27 am on 20 February 2007

Papua New Guinea's Government is closely monitoring the drop in global copper and oil prices as the downturn appears to be lower than its budget estimates for this year.

Treasury Minister Sir Rabbie Namaliu told the Post Courier paper that high commodity prices last year increased revenue for the Government but there had been a downturn in oil and copper prices.

He said while PNG's 2007 Budget forecasts were conservatively based and factored in a decline in commodity prices in 2007, there has been a marked downturn in the price of oil and copper since Christmas, with copper and oil now 16 per cent and 12 per cent lower than budget estimates for their 2007 averages.

He says this is an important factor that the Government will be monitoring very closely and taking into account in budget reviews.