IMF Reaches 216 Million Dollar Loan Deal with Papua New Guinea
The IMF reached a deal to provide Papua New Guinea with 216 million dollars. These funds support reforms as growth is expected to slow to 3.8 percent in 2026.
The International Monetary Fund (IMF) has reached staff-level loan agreements with Papua New Guinea that will unlock approximately $216 million in funding once officially approved. As the largest economy among Pacific island nations, the country is currently working to resolve a long-standing balance-of-payments issue by stabilizing its public finances and advancing structural reforms that have faced significant delays.
The new pacts include the sixth reviews of both the extended credit facility and the extended fund facility, as well as a third review under the resilience and sustainability facility. If the agreements receive final approval, the nation will receive roughly $82 million under the first two categories and as much as $134 million under the third. These disbursements would bring the total amount of IMF support to the country to about $1.06 billion.
The lender currently projects that economic growth in the country will moderate to 3.8% in 2026, compared to an estimated 5.6% in 2025. While the economy is expected to show resilience, it faces headwinds as liquefied natural gas production stabilizes and conflict in the Middle East impacts global trade. These external factors are expected to weaken demand for non-resource exports and increase the cost of essential imports, particularly oil. Additionally, headline inflation is forecasted to rise to 5.0% by 2026.
