For the past three years there has been a definite mood of optimism after what has commonly been termed the "lost decade" during which profligate spending and corruption caused most social indicators to worsen considerably.
But in the past 3-5 years the government of the day has avoided the temptation of over-committing windfall earnings from high commodity prices. Much of these funds remain in trust accounts for short to medium-term development projects.
National budgets have been in balance or in surplus and foreign exchange holdings have reached unprecedented heights in excess of US$2.5 billion.
The central bank has adopted a stance of trying to minimise volatility in exchange rates for the kina, but pressure is growing on the inflation front.
A recent protest by University of Technology students in Lae highlighted the issue of spiralling prices and the problems this poses for subsistence farmers and the millions of people on low incomes.
A spate of letters to newspaper editors, and news reports, suggests wide support for the student action.
The government has to seriously address this issue even though, as in the case of most countries around the world, much of the inflation has been fuelled by high oil prices and skyrocketing food prices that have even affected basic items.
For the first time in decades these issues can be addressed from a position of strength as a result of strong revenue flows, a stable and stronger kina and a strongly growing economy.
Since the student protest there has been a considerable easing in the price of crude oil. This has begun to flow though in cuts at the petrol pump, but there are concerns about the global economy following the collapse of the giant investment bank Lehman Bros in the United States.
In spite of the wobbles on world financial markets, PNG is in the throes of seeing the start-up of potential megaprojects that will further transform the national economy.
Foremost of these is the massive K40 billion liquefied natural gas project, now undergoing front-end engineering and design, on which construction could commence in 2010 following a final investment decision at the end of next year.
Even before that work starts Ramu Nickel will add nickel to the inventory of mineral exports from this country from a project costing in the vicinity of K4 billion kina, the cost itself being a symptom of the inflationary conditions of the recent past.
In size and scope Ramu Nickel will not be too different from the giant start-ups of the past, from Bougainville Copper in the early 1970s, Ok Tedi and Porgera in the 1980s, and Porgera and Lihir, which began production in 1997.
The development costs for those ventures ranged from what now seems an incredibly low K660 million for Bougainville Copper to more than K1 billion for Lihir, which is spending almost three times that for a major expansion.
The Hidden Valley gold-silver mine will begin production next year. Project owners, South Africa's Harmony Gold and Australia's Newcrest, have already begun feasibility studies on what could be the next giant - the Wafi copper-gold project in Morobe Province.
Feasibility studies are also well advanced and reportedly going well for another potential giant in that province - Marengo's Yandera copper-molybdenum project.
Only time will tell if the rapid development plans of these latter corporations may be impinged by the current turmoil in financial markets, although the insatiable appetite of the strongly growing economies of China and India mitigate against any slowdown.
