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

_IMF Staff Country Reports, December 3, 2018_

## Source details

**Canonical URL:** [Papua New Guinea: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea](https://www.imf.org/en/publications/cr/issues/2018/12/03/papua-new-guinea-2018-article-iv-consultation-press-release-staff-report-and-statement-by-46432)

## Other formats

- [Markdown version](/en/publications/cr/issues/2018/12/03/papua-new-guinea-2018-article-iv-consultation-press-release-staff-report-and-statement-by-46432/index.md)
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## Bibliographic details
- Published: December 3, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484388150.002

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### Macroeconomic overview and recent performance
- The Papua New Guinea (PNG) economy has grown sluggishly in recent years, reflecting a combination of domestic and external factors.
- External shocks cited:
  - adverse terms of trade movements,
  - a drought,
  - in 2018, a large earthquake.
- Domestic constraints cited:
  - difficult fiscal consolidation,
  - a shortage of foreign exchange sustained by an overvalued exchange rate,
  - import compression,
  - weak investment in the non-resource sector.

### Fiscal position and public debt
- Progress in 2017-18:
  - the new government made important progress in narrowing the fiscal deficit,
  - adopted a medium-term revenue strategy.
- Current concerns:
  - progress on fiscal consolidation has stalled,
  - the debt-to-GDP ratio is well above the medium-term target.

### Monetary and exchange rate developments
- Monetary authorities have begun to facilitate exchange rate adjustment and strengthen the monetary framework.
- The report links the shortage of foreign exchange and an overvalued exchange rate to import compression and weak non-resource investment.

### Policy analysis and recommendations
- Main macroeconomic challenges for the government:
  - finish putting in place policies that will help promote economic stability,
  - strengthen the long-term development framework.
- Recommended policy approach:
  - more ambitious fiscal consolidation coupled with faster exchange rate adjustment would yield favorable results.

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## Content in this bundle

- **Country Report**
  - [Country Report (Markdown version)](/-/media/files/publications/cr/2018/cr18352.pdf.md){rel="alternate" type="text/markdown"}
  - [Country Report (PDF)](/-/media/files/publications/cr/2018/cr18352.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2018/12/03/papua-new-guinea-2018-article-iv-consultation-press-release-staff-report-and-statement-by-46432_