15 Oct 2008

New Caledonia economy expected to slow down

11:17 am on 15 October 2008

New Caledonia's employer organisation, MEDEF, says the territory's economy is set to return to normal conditions after years of exceptional growth.

Its secretary-general, Francois Peronnet, says the euphoric phase is coming to an end as the credit crisis and the fall in the price of nickel have hit at the same time.

Mr Peronnet says while the Goro nickel plant is about to be completed, questions have arisen about the financing of the Koniambo project in the north.

He says the price of nickel has dropped by about 80 percent since May last year which means its production is no longer profitable.

Mr Peronnet says the government is bound to see a significant drop in tax revenue.