Papua New Guinea: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea
IMF Staff Country Reports, December 29, 2017
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- Papua New Guinea: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea
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Bibliographic details
- Published: December 29, 2017
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484335918.002
Summary findings
- Economic activity in Papua New Guinea remained subdued in 2017.
- Slow growth, generous tax treatment of the Liquefied Natural Gas project, the drought, and weak tax administration contributed to declining tax revenues.
- These factors led to a substantial fiscal deficit and an increasing debt-to-GDP ratio.
- Inflation was boosted to over 6 percent by drought effects, but is beginning to ease.
- Near-term risks to the outlook are tilted to the downside.
- Over the medium term, risks are more balanced owing to the upside potential of new resource sector projects and, possibly, a pickup in commodity export prices.
Causes of fiscal deterioration and revenue weakness
- Generous tax treatment of the Liquefied Natural Gas project.
- Drought-related economic disruptions.
- Weak tax administration.
- Slow overall economic growth.
Inflation and external conditions
- Inflation: boosted to over 6 percent by drought effects; currently beginning to ease.
- External and commodity factors: medium-term upside potential from new resource sector projects and potential pickup in commodity export prices.
Risks and outlook
- Near-term risks: tilted to the downside.
- Medium-term risks: more balanced because of potential new resource projects and possible commodity price improvements.
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- Country Report