Papua New Guinea : 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea

Author/Editor:

International Monetary Fund. Asia and Pacific Dept

Publication Date:

December 29, 2017

Electronic Access:

Free Full Text (PDF file size is 4753 KB).Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Papua New Guinea (PNG) is experiencing weak economic growth resulting from falls in major commodity export prices, the completion of the huge PNG LNG pipeline project, and a severe drought. These developments have led to fiscal deficits and increasing public debt as government revenues have declined. They have also led to foreign exchange (FX) shortages and import compression, partly owing to large private debt service outflows related to the LNG project. A new government, elected in July, is keen to address the immediate fiscal challenges as well as longer-term structural reform. A credible government commitment to substantial fiscal consolidation through the medium term could mitigate the risk that financing of the fiscal deficit could become extremely difficult, leading to a fiscal and financial crisis. In such a crisis, a severe fiscal contraction would be likely and monetary and exchange policies would also be at risk.

Series:

Country Report No. 17/411