Papua New Guinea and the International Monetary Fund (IMF) have reached a staff-level agreement on the fourth review under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF), as well as the first review under the Resilience and Sustainability Facility (RSF), the IMF announced on April 8, 2025.
This development unlocks access to US$117.5 million (PGK 445 million) in funding, contingent upon approval by the IMF Executive Board. The agreement follows a recent IMF mission to PNG, during which officials conducted the 2025 Article IV Consultation and reviewed progress on PNG’s economic reform programme.
The IMF lauded PNG’s continued commitment to economic reforms, fiscal consolidation, and public financial management improvements. Growth in 2025 is now projected at 4.7per cent, buoyed by recovery in the non-resource sector and ongoing infrastructure spending. Inflation is expected to moderate to 5.2per cent, down from 6.8per cent in 2024.
Policy reforms include increasing tax compliance, strengthening governance at state-owned enterprises, and improving foreign exchange allocation. The Central Bank is also working on strengthening monetary policy tools and exchange rate transparency. Under the RSF, PNG has committed to climate-related fiscal risk management and reforms supporting green public investment.
The IMF commended the government’s prudent fiscal management but urged stronger implementation of reforms to build resilience. Structural challenges remain, particularly in revenue collection, power supply, and infrastructure bottlenecks. The Fund also emphasised the importance of restoring investor confidence by addressing foreign exchange shortages and improving transparency.
