IMF approves $A231m in funding for Papua New Guinea
The International Monetary Fund Executive Board has approved reviews of Papua New Guinea’s lending arrangements, unlocking total disbursements of approximately US$163 million ($A231 million).
The Extended Funding Facility and Expanded Credit Facility regulations were approved in 2023 to resolve the protracted balance of payments problem causing foreign exchange shortages.
The 24-month Resilience and Sustainability Facility regulation, approved in 2024 for SDR 197.4 million, aims to address risks to balance of payments stability arising from climate change.
The completion of the sixth EFF/ECF review gave Papua New Guinea immediate access to approximately US$82 million under the regulations.
The third RSF review makes approximately $81 million available to address long-term balance of payments structural vulnerabilities associated with climate change.
The IMF said that under the EFF/ECF arrangements, all quantitative performance criteria and indicative targets for end-December 2025 and all indicative targets for end-March 2026 have been met.
All six structural criteria were met or implemented with a delay.
The IMF predicts that growth in Papua New Guinea will decline from an estimated 5.6 percent in 2025 to 3.8 percent in 2026.
The headline predicts inflation will rise modestly to 4.8 percent in 2026; higher import costs are partially offset by the extension of the goods and services tax cut until the end of 2026.
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