Papua New Guinea 

Papua New Guinea country policy

Policy established 12 September 2006

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 1000 mln euro
• Early warning signal 75 mln euro
• - of which was used as at 2010-07-31 0 mln euro

Country class: 5

Papua New Guinea country facts

Atradius Dutch State Business Economic Research
Country Report last updated :  23 June 2010
Country :  PAPUA NEW GUINEA

Political Situation

Relatively Stable

Head of state
Queen Elisabeth II, represented by Sir Paulius Matane.

Form of government
Government of a fragile 13 party coalition under the leadership of PM Michael Somare. The parliament was elected in June 2007 for a 5 year term.

Internal Economic Situation
Strong Recovery 

General situation
PNG’s economy is driven by the export of oil and other mining commodities like gold, copper, nickel and cobalt. Lawlessness, extremely poor infrastructure and low education level hinder development in non-mineral sectors and subsistence agriculture is the common employment of most Papua’s. PNG’s economy got a blow from the global recession and lower commodity prices but the economy is rebounding this year. Financial sector remains very shallow, but is generally sound. Overexposure to projects related to the LNG project is an emerging risk.    
 
External Economic Situation
Balanced Current Account

Main sources of foreign exchange
Oil & gas, gold, copper, nickel, cobalt and timber.

Main foreign markets
Australia (42%), EU (10%), Japan (13%), Philippines (7%)

Main expenses of foreign exchange
Capital goods, food, chemicals, manufactured goods

Balance of payments 
Current account has turned negative due to the lower commodity prices. However the deficit is covered by capital inflow (mainly portfolio investment).