19 Sep 2007

Ratings agency Standard and Poors raises PNG currency rating

10:42 am on 19 September 2007

The financial ratings agency Standard & Poor's has raised Papua New Guinea's long-term currency rating to 'B+' due to what it says are improvements in the country's balance sheet and continued political stability.

The Post Courier newspaper reports that favourable economic conditions were boosted by high commodity prices and the Somare government's decision to reduce debt.

A credit analyst for S and P, Kyran Curry, says the Government has used the additional revenue to reduce its debt burden, and this has enhanced its fiscal flexibility.

Mr Curry says however that the quality of public services remains poor, with little improvement in literacy and other human development indicators.

And he says a large proportion of the PNG population remains disenfranchised from the flown-on benefits of an improving economy.

Mr Curry says further improvements in creditworthiness will depend largely on the new government's success in opening up the economy to increase its efficiency, as has begun in the communications sector, and in strengthening public service delivery.