The International Monetary Fund has delivered a cautiously optimistic review of Papua New Guinea’s economic progress following its September 2025 consultation in Port Moresby.
The IMF said the government’s reform agenda under the Extended Credit Facility was producing tangible improvements in fiscal management, revenue collection, and governance. According to the report, PNG has met most of its program benchmarks, narrowing its fiscal deficit and improving the transparency of public accounts.
The central bank’s move to align the exchange rate more closely with market fundamentals was also noted as a positive step toward restoring investor confidence. The IMF highlighted that external debt remains within manageable levels, but warned that Papua New Guinea’s vulnerability to commodity price fluctuations requires diversification.
It said that productivity growth, institutional capacity, and infrastructure constraints still hold back sustainable development. Government officials responded that reforms in state-owned enterprises, public investment management, and procurement transparency would continue through 2026.
The IMF urged Papua New Guinea to strengthen its financial sector supervision and accelerate structural changes that could boost per capita income. The review also encouraged broader social spending to cushion vulnerable populations while keeping fiscal consolidation on track. As Papua New Guinea approaches its 50th independence anniversary, the IMF’s assessment provides a validation of progress made and a reminder of the structural transformation still required.
