IMF Reaches $189 Million Funding Agreement With Papua New Guinea

The International Monetary Fund reached a staff-level agreement with Papua New Guinea on the final reviews of its Extended Credit Facility, Extended Fund Facility, and Resilience and Sustainability Facility arrangements. Pending approval by the IMF executive board, the deal will unlock approximately $189 million, comprising $82 million in immediate funding and up to $107 million in climate financing. This agreement would bring the total IMF disbursement to the country to roughly $1.19 billion.

Papua New Guinea met most performance criteria for end-June 2026, though it missed its fiscal deficit target for the first half of the year. In response, the government passed a supplementary budget in September and intends to limit the 2026 deficit to 1.6 billion kina.

The IMF forecasts a slowdown in Papua New Guinea's real GDP growth, projecting 3.1 percent in 2026 down from 6.2 percent in 2025. The organization attributes this decline to leveling LNG output, the impact of El Nino on mining and farming, and increased import costs resulting from conflict in the Middle East.