Papua New Guinea's Export Earnings Low

The state of the country's economy is currently under a lot of stress, with Central Bank insiders telling NBC that PNG's export earnings is at very low levels.

This is due to depressing international commodity prices.

A Central Bank insider told NBC Current Issues, this is reflected in the country's balance of payments position, which continues to record deficits in its accounts.

He said this is exerting more pressure on the foreign reserves levels and the exchange rates with PNG Kina falling against the US Dollar by 15 per cent as of this week.

NBC Current Issues is reliably informed, this is also putting immense pressure on the government's finances, adding 2016 Budget was framed on assumptions of higher prices, especially the oil and LNG prices.

The source said the only option to at least offset this effect is to pursue domestic and foreign debts to finance the budget.

However, for domestic debt financing, the market has reached their limit in acquiring additional government treasury bills issuance, exerting another pressure on the government.

In addition, the source said the planned sovereign bond issuance is yet to be pursued, and given the current worsening economic indicators and credit ratings, its success looks gloomy.

The source said, budget cuts is inevitable, with public spending and service delivery to be greatly affected.

NBC News / PNG Today