Papua New Guinea’s economy is expected to remain one of the Pacific’s stronger performers in 2026, with Westpac forecasting growth of 4.6 per cent despite mounting geopolitical tensions and continued global economic uncertainty.
In its June 2026 PNG Quarterly Economic Update, Westpac said the economy had demonstrated resilience following estimated growth of around 5.5 per cent in 2025. The bank expects both the resource and non-resource sectors to contribute to expansion over the coming year, supported by improving foreign exchange conditions, stronger commodity exports and continued infrastructure investment.
Westpac noted that international events, particularly conflict in the Middle East, have increased fuel and freight costs, creating additional pressure for businesses dependent on imported goods and transport. To cushion those impacts, the PNG Government introduced a K1 billion fuel stabilisation programme that has helped contain domestic fuel prices while supporting importers.
The report highlights encouraging signs across the domestic economy. Agriculture, services and industrial activity continue to expand, particularly in provincial centres, while communications has become one of the country’s fastest-growing sectors following the rollout of Starlink services and the commissioning of the Pukpuk-1 submarine cable. Gold exports have strengthened on the back of higher prices and improved production, while cocoa exports continue to benefit from favourable international markets. Coffee prices, however, are expected to moderate after a prolonged period of exceptionally high returns.
Westpac also points to gradual improvements in the foreign exchange market. IMF-backed reforms and exchange rate adjustments have reduced waiting times for foreign currency and improved market liquidity, although demand continues to exceed supply. The Bank of Papua New Guinea’s decision in June to leave the Kina Facility Rate unchanged at 5.0 per cent provides additional policy stability for businesses.
Looking ahead, the report identifies Papua LNG as the country’s most important medium-term growth project, with a final investment decision anticipated later this year. Together with Wafi-Golpu, Connect PNG infrastructure projects and ongoing investment in mining, Westpac believes these developments position PNG for sustained economic growth despite continuing risks from commodity prices and global uncertainty.
