IMF Executive Board Concludes the Sixth Reviews Under the Extended Arrangement Under the Extended Fund Facility and the Arrangement Under the Extended Credit Facility, and Third Review Under the Resilience and Sustainability Facility Arrangement with Papua New Guinea
IMF News, June 8, 2026
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- IMF Executive Board Concludes the Sixth Reviews Under the Extended Arrangement Under the Extended Fund Facility and the Arrangement Under the Extended Credit Facility, and Third Review Under the Resilience and Sustainability Facility Arrangement with Papua New Guinea
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Bibliographic details
- Published: June 8, 2026
Reviews, disbursements, and program scope
- The Executive Board completed:
- Sixth Reviews under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF).
- Third Review under the Resilience and Sustainability Facility (RSF).
- Immediate disbursements enabled:
- SDR 60.53 million (about US$82 million) under the EFF/ECF arrangements.
- SDR 59.22 million (about US$81 million) under the RSF arrangement.
- Total disbursements under IMF-supported programs to date:
- SDR 742.23 million (about US$1012 million).
- Original approvals:
- EFF/ECF arrangements approved on March 22, 2023, in an overall amount equivalent to SDR 684.32 million (260 percent of quota).
- RSF arrangement approved on December 11, 2024, in an overall amount of SDR 197.4 million (75 percent of quota), with a 24-month duration.
- RSF purpose: support policies to address longer-term structural balance of payments vulnerabilities associated with climate change.
Program objectives and policy focus
- Core program aims:
- Address a protracted balance of payments need manifested in foreign exchange shortages.
- Support authorities’ reforms to address longstanding structural impediments to inclusive growth.
- Strengthen debt sustainability, alleviate FX shortages, foster good governance, and build climate resilience, while protecting the vulnerable and promoting inclusive and sustainable growth.
- Specific policy priorities highlighted:
- Continued revenue mobilization, consistent with the authorities’ Medium-Term Revenue Strategy.
- Further steps to rationalize current spending and improve public investment efficiency.
- Securing fiscal space for social and capital spending and engaging in prudent borrowing.
- Central banking reforms to improve FX access and restore Kina convertibility, with the crawl like arrangement as the nominal anchor.
- Tighter monetary policy stance through timely adjustments in the Kina Facility Rate.
- Further development of the interbank market, strengthening the Bank of PNG’s liquidity management capacity, and fully operationalizing its lender of last resort function.
- Decisive actions to improve governance and strengthen financial integrity, including strengthening the AML/CFT framework and ensuring the Independent Commission Against Corruption can fully carry out its mandate.
- RSF measures: strengthen disaster risk management, integrate climate considerations in infrastructure governance, create an enabling environment for climate finance, and set up incentives for forest protection and fuel efficiency.
Economic outlook and projections
- Growth projections:
- Growth is projected to moderate to 3.8 percent in 2026 after accelerating to 5.6 percent in 2025.
- Over the medium term, growth is expected to moderate and stabilize at just above 3 percent.
- Inflation projections:
- Headline inflation is expected to rise modestly to 4.8 percent in 2026.
- Inflation is expected to converge to around 4.5 percent over the medium term.
- Drivers and mitigating factors:
- 2026 moderation reflects plateauing of LNG production, weaker demand for non-resource exports amid the ongoing war in the Middle East, and higher import costs.
- Rising shipping costs drive inflation but are partially mitigated by the extension of GST relief through end-2026.
- Medium-term growth driven mainly by continued expansion of the non-resource sector.
Risks and upside scenarios
- Significant downside risks identified:
- Weaker external demand.
- Social instability.
- Unstable critical utilities.
- Natural disasters.
- Global risks: prolonged war in the Middle East, escalating protectionist trade measures, and a decline in international aid.
- Capacity constraints that limit the government’s ability to design and implement stabilization, development, and climate adaptation policies.
- Key upside risks:
- Higher commodity prices.
- Kickoff of major resource projects for which final investment decision could occur in the coming months.
Program performance and implementation
- Performance assessments:
- Program performance has remained satisfactory, with sustained commitment to reforms by the authorities.
- All quantitative performance criteria and all indicative targets for end-December 2025 were met.
- All indicative targets for end-March 2026 under the EFF/ECF arrangements were met.
- All six structural benchmarks due were met or implemented with delay.
- Three reform measures under the RSF arrangement were implemented.
Executive Board statement highlights (Mr. Bo Li, Deputy Managing Director, Acting Chair)
- Positive assessment:
- Authorities advanced their reform agenda, yielding tangible results including strong growth, and declining debt and FX shortages.
- Sustained commitment to homegrown reforms is essential to achieve more resilient and inclusive economic growth.
- Fiscal policy guidance:
- Authorities have reduced the fiscal deficit and are on track to deliver additional consolidation in 2026.
- Emphasis on revenue mobilization, expenditure rationalization, public investment efficiency, fiscal space for social and capital spending, and prudent borrowing.
- Monetary and exchange rate guidance:
- Access to foreign exchange improved due to central banking reforms, reduction of the Kina’s overvaluation, and higher commodity prices.
- The crawl like arrangement remains appropriate as the nominal anchor to help restore Kina convertibility.
- A tighter monetary policy stance via timely Kina Facility Rate adjustments is needed.
- Further development of interbank market, liquidity management, and lender of last resort functionality recommended to improve monetary policy transmission and safeguard financial stability.
- Governance and financial integrity:
- Decisive improvements in governance and financial integrity will enhance the business environment for activity and investment.
- Strengthen AML/CFT framework and ensure Independent Commission Against Corruption can fully carry out its mandate.
- Climate resilience:
- RSF focus on disaster risk management, climate integration in infrastructure governance, enabling climate finance, and incentives for forest protection and fuel efficiency will support resilience objectives.
IMF Press Release No. 26/192 — June 8, 2026