Papua New Guinea: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea

December 3, 2018

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Papua New Guinea: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Summary

The Papua New Guinea (PNG) economy has grown sluggishly in recent years, reflecting a combination of domestic and external factors. External factors have included adverse terms of trade movements, a drought, and, in 2018, a large earthquake. Domestic factors have included a difficult fiscal consolidation and a shortage of foreign exchange, sustained by an overvalued exchange rate, leading to import compression and weak investment in the non-resource sector. The main macroeconomic challenges for the government are to finish putting in place policies that will help promote economic stability, and to strengthen its long-term development framework. In 2017-18, the new government made important progress in narrowing the fiscal deficit, and adopted a medium-term revenue strategy. But progress on fiscal consolidation has stalled, and the debt-to-GDP ratio is well above the medium-term target. Monetary authorities have begun to facilitate exchange rate adjustment and strengthening of the monetary framework. Stronger economic policies, involving more ambitious fiscal consolidation coupled with faster exchange rate adjustment would yield favorable results.

Subject: Economic and financial statistics, External debt, External sector statistics, Foreign exchange, Government finance statistics, Public debt

Keywords: Australia and New Zealand, Commodity export price, CR, Debt, Exposes PNG, External sector statistics, Global, Government finance statistics, ISCR, Liquidity management challenge, LNG project, Pacific Islands, PFTAC mission, PNG NSO staff, Project debt repayment, Resource, Resource revenue

Publication Details

Pages:

71
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2018/352
Stock No:

1PNGEA2018001
ISBN:

9781484388150
ISSN:

1934-7685

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