7 May 2009

New Caledonia to face economic crisis late, says study

7:12 pm on 7 May 2009

There is a warning in New Caledonia that the economic crisis may strike the territory with some delay and spill over into social unrest.

A study by an economics professor, Gael Lagadec, and a parliamentarian, Alain Descombels, says so far New Caledonia has withstood the downturn and this year, economic growth is expected to be 2.9 percent.

But it says the boom, fuelled by the nickel industry and public investments, has exacerbated social differences, with a quarter of households having slipped below the poverty line.

The authors point out that the minimum wage is about 70 percent of what it is in France while household costs are double the figure in France.

The study comes as the territory gears up for provincial elections on Sunday to choose assemblies for a five-year term.