PM holds fruitful talks with IMF to advancing PNG’s economic transformation
Prime Minister James Marape held high-level discussions with Deputy Managing Director of the International Monetary Fund [IMF], Bo Li and his senior economic advisory team at the headquarters in Washington D.C. in the United States last week.
Mr. Li is the person who directly oversees Papua New Guinea’s economic programme within the Fund. The discussion was open, constructive and far-reaching, with both parties reaffirming their shared commitment to advancing PNG’s economic transformation.
In a statement, Prime Minister Marape said PNG remains committed to macroeconomic stability, fiscal reform and debt sustainability.
He said the engagement with the IMF was a deliberate and considered policy decision taken by his government in 2019, shortly after assuming office.
“We made a conscious decision to invite the IMF back into Papua New Guinea after years of ad hoc and unsustainable fiscal practices.
“Our goal has always been to place the country on a disciplined and transparent economic path, reduce reliance on commercial loans, and align ourselves with credible multilateral institutions that promote good governance and long-term development,” Prime Minister Marape said.
Mr. Marape noted that unlike previous reliance on high-interest commercial loans and short-term financing arrangements, the partnership with the IMF, World Bank and Asian Development Bank is based on mutual respect and shared responsibility.
He said these institutions are not peripheral advisors but internationally mandated agencies with a proven track record of supporting economic reform globally.
Meanwhile, the meeting acknowledged the significant strides made by PNG since 2020 in implementing a comprehensive home-grown reform agenda.
Central to this agenda is a 33-point reform programme initiated by the Government with input and support from Treasury, Bank of Papua New Guinea and the IMF.
The Prime Minister confirmed that most of the reforms have been successfully implemented, with only a few remain outstanding.
He assured Mr. Li that these will be addressed in the coming months.
“Papua New Guinea’s reform journey is not dictated by the IMF. These are reforms we initiated ourselves, recognizing that our economy needed structural change,” said Prime Minister Marape.
“These reforms are not only necessary—they are urgent. We must take ownership of our future and lay a foundation for the next 50 years.”
Government committed to achieving balanced Budget by 2027
Prime Minister James Marape has reiterated his government’s firm commitment to achieving a balanced budget by 2027.
He said that from 2028, PNG will embark on an aggressive debt repayment path, anchored by the implementation of the Sovereign Wealth Fund, which is expected to be fully operational by that time.
“If we stick to our fiscal consolidation path, eliminate wastage, and grow our revenue base, we will be in a position to repay our debts and reduce our debt-to-GDP ratio to sustainable levels—targeting 30 percent or lower,” Prime Minister Marape stated.
He highlighted that by 2033, the government aims to eliminate all public debt accumulated since Independence in 1975, marking a historic milestone for the country.
IMF projects PNG’s strong economic outlook amid global uncertainty
According to IMF projections shared during the meeting, Papua New Guinea’s economy is expected to grow by 4.7 percent in 2025, a rate higher than the global average [3.7 percent] and outperforming the majority of Pacific Island Forum and ASEAN economies.
The IMF attributed this growth to prudent fiscal management, the recovery of non-resource sectors, and consistent reform momentum.
Prime Minister Marape noted that the country has experienced four consecutive years of non-resource sector growth driven by agriculture, fisheries, forestry, and small-scale enterprise proving that the economy is beginning to diversify beyond extractive industries.
“For the first time in our post-Independence history, we are seeing consistent growth from sectors that benefit our rural population. This is no accident—it is the result of targeted investment and reform,” the Prime Minister said.
Also at the meeting, Prime Minister Marape pitched new areas of IMF technical assistance, including support for:
- Establishing AI-driven digital platforms for public procurement and public service recruitment, aimed at strengthening transparency and merit-based selection;
- Expanding renewable energy generation through hydro, geothermal and solar technologies;
- Utilizing domestically available natural gas to power island provinces and supply neighboring Pacific nations;
- Strengthening the country’s capacity to manage its Sovereign Wealth Fund transparently and effectively.
“These initiatives will not only help us modernize government, but also attract private investment and ensure efficient delivery of public services,” he said.
Meanwhile, IMF welcomed Papua New Guinea’s clarity of vision and fiscal discipline, acknowledging the country’s success in clearing its foreign exchange backlog, stabilizing the Kina, and improving macroeconomic management.
They also advised that the government consider incentives for exporters to repatriate foreign currency earnings, which would help further stabilize the balance of payments.