March 31 - The International Monetary Fund has reached staff-level agreements that, if approved, would provide Papua New Guinea with access to approximately $216 million, the fund said in a statement issued after a mission to Port Moresby.
The disbursement is structured across three facilities. About $82 million would be available under the sixth reviews of the extended credit facility and the extended fund facility, while up to $134 million could be released under the third review of the resilience and sustainability facility. Taken together, the new funds would bring total IMF disbursements to Papua New Guinea to roughly $1.06 billion.
PNG, the largest economy among Pacific island nations and a country reliant on mining and energy exports, is contending with a prolonged balance-of-payments challenge. The IMF statement said the authorities are addressing that pressure by stabilising public finances and advancing long-delayed structural reforms, efforts the fund is supporting through its financial assistance.
The IMF's projections in the statement show a moderation in growth: estimated expansion of 5.6% in 2025 is forecast to slow to 3.8% in 2026. The lender noted the economy should remain resilient despite headwinds tied to a plateau in liquefied natural gas production and external pressures from the Middle East conflict, which the fund said could reduce demand for certain non-resource exports while increasing import costs, including those of oil.
Headline inflation is projected to rise to 5.0% in 2026, the IMF added.
Details of the arrangements
- Staff-level agreements reached following an IMF mission to Port Moresby.
- Coverage includes: sixth reviews of the extended credit facility and extended fund facility; third review under the resilience and sustainability facility.
- Estimated disbursements: around $82 million under the two reviews and up to $134 million under the resilience and sustainability facility, totaling about $216 million if approved.
- Total IMF disbursement to date would reach about $1.06 billion should these amounts be released.
Economic outlook and constraints
The IMF flagged several dynamics shaping PNG's near-term outlook: a slowdown in GDP growth to 3.8% in 2026 from an estimated 5.6% in 2025, a projected rise in headline inflation to 5.0% in 2026, and vulnerabilities tied to a levelling off in liquefied natural gas output and higher import bills. The fund’s assessment frames its financial support as part of a broader effort to buttress public finances and accelerate reforms intended to ease balance-of-payments strains.