Moody's stabilizes Papua New Guinea view

Moody's Investors Service said it changed the outlook on the government of Papua New Guinea (PNG) to stable from negative and affirmed the B2 long-term issuer and senior unsecured ratings.

“The change of the outlook to stable is driven by a stabilization in the government's debt burden arising in part from the positive terms of trade shock from higher global prices for PNG's commodity exports, as well as a renewed commitment to long-term fiscal sustainability that has been reinforced by its re-engagement with development partners.

“Moody's now expects a stable debt burden and debt affordability in the next few years. In addition, government liquidity and external vulnerability risks have ebbed given improvements in domestic funding conditions and the balance of payments, leading to lower domestic interest rates and higher foreign exchange reserves, respectively, with Moody’s expects to continue,” the agency said in a press release.

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