ONDD has eased its cover policy on Papua New Guinea for medium and long-term export credit transactions. The cover ceiling has increased from €
230mn up to €300mn. In the framework of the OECD Arrangement, ONDD has decreased its insurance premiums from category 6 to category 5 (out of 7).
The political stability has improved the economic foundations of Papua New Guinea. Consequently, the 2007 elections are important to safeguard the political continuity. The Papuan economy is supported by the price increase of its many mineral materials (gold, copper, petrol), which make it vulnerable in case of a turn in the tendency.
For its development, the country still needs foreign aid, especially from its most important Australian commercial partner. The growth perspectives are advantageous on the medium term, particularly when the gas reserves will be exploited after 2009. In an unchanged situation, implying a preservation of a stable budget, an accommodating monetary policy and an appropriate exchange rate level, the country could keep its debt ratios sustainable.