Key facts
- IMF staff and Papua New Guinea reached a staff-level agreement on final reviews of funding facilities.
- Approval by the IMF board could unlock up to $189 million for Papua New Guinea.
- The country would receive about $82 million immediately and up to $107 million in climate financing.
- Total IMF disbursements would reach about $1.19 billion if approved.
- Real GDP growth is expected to slow to 3.1% in 2026 from 6.2% in 2025.
- Headline inflation is expected to rise to 4.8%.
The International Monetary Fund announced on Tuesday that it has reached a staff-level agreement with Papua New Guinea regarding the final reviews of its funding facilities, including the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF). This agreement is subject to approval by the IMF's executive board.
If approved, Papua New Guinea would receive approximately $82 million immediately, with an additional $107 million available as climate financing. This would bring the total disbursements from the IMF to about $1.19 billion.
The IMF projects that Papua New Guinea's real GDP growth will decelerate to 3.1% in 2026, down from an anticipated 6.2% in 2025. This slowdown is attributed to leveling LNG output, the impact of El Nino on agriculture and mining, and increased import costs driven by the conflict in the Middle East. Headline inflation is forecast to rise to 4.8%.
Papua New Guinea's government reportedly met most of its performance targets for end-June 2026, missing only one quantitative performance criterion. Despite missing its fiscal deficit target in the first half of the year, the government passed a supplementary budget in September and maintains its aim to keep the 2026 deficit at 1.6 billion Papua New Guinea kina ($345.28 million).