Minister Assisting the Prime Minister on Treasury matters Ian Ling Stucky has reported an improved credit rating for Papua New Guinea from a negative B2 to positive B2.
This announced rating comes from Moody’s, which does the review every two years based on its independent observance of the economic health of a nation.
Minister Ling Stucky said because ratings by credit agencies were important for financial institutions to operate in a stress-free environment, he has spent time with PNG’s credit rating agencies to ensure that they are fully informed of PNG’s economic circumstances and future plans.
“Credit ratings agencies provide an independent view of the economic health of nations and businesses. They conduct rigorous assessments based on clear criteria and give countries and businesses a ‘credit rating,'” the minister assisting the Prime Minister on Treasury matters explained.
He said a meeting on Friday last week with Moody’s PNG assessors noted the positive outcome of the 2023 Budget spending, which highlighted increase in revenue and a decrease in borrowing.
“We drew particular attention to wages expenditure coming in slightly below budget – a long way from the wage overruns of over a billion Kina in 2018. The Marape-Rosso Government is keeping to the 13-year Budget Repair Plan and is on track to deliver a budget surplus by 2027. This is when we actually start paying down our debt levels,” he said.
“There was also a discussion of the recent second review of the IMF program, a home-grown reform program backed by our international partners. Continuing strong performance under that program, including all of the independent transparency and accountability brought by the IMF, is also a positive development.
In the discussions, Moody’s indicated that credit rating reviews for all countries were going to be more frequent. Rather than once every two years, they will be once every six months. The Treasury, Departments of Finance, National Planning, and other Departments more generally, need to step up to this challenge of more regular reporting and more accountability. This has been the case under the IMF program.
Clearly, this will also be needed for credit rating agencies. The Marape-Rosso Government strongly supports increased accountability in government operations. Providing information to credible and independent international organizations is a key part of this. And all part of our approach to lifting PNG’s credit rating even further to boost investment, growth, and job creation,” stated the Minister.
“As part of our Targeted Grants Strategy, as we look at options of moving away from debt financing and towards grants, we will also need to provide more information.
