Public Debt

Public debt is sustainable when the government is able to meet all of the payment obligations without recourse to exceptional financial assistance or face the prospects of default. 

NRI Discussion Paper No.195 entitled “Fiscal Policy for Sustainable Debt in PNG” by Professor Satish Chand and Dr. Osborne Sanida that was released today to provide answers to the specific question on the size of the primary fiscal balance (i.e. revenue minus expenditure, exclusive of interest payments).

According to the Mid-Year Economic and Fiscal Outlook Report (MYEFO) released by Treasury on Monday, the public debt is expected to increase to K26 billion (K25,939.4 million) from the projected 2017 Budget estimate of K22 billion (K21,623.3 million).

This is an increase of K4.3 billion (K4,316.1 million).

Treasury attributes the potential increase to the growth in debt levels due to rolling over of Government Treasury Bills and marginal increase in Treasury Bills financing in 2017.