The International Monetary Fund (IMF) has greenlit an additional disbursement of US$127 million (approximately K492 million) in financing, bolstering its total financial support under the current arrangements to US$303 million (K1.2 billion) to Papua New Guinea. This decision comes in the wake of a comprehensive review conducted by a team from the IMF, led by Tahsin Saadi Sedik, during their visit to Port Moresby from April 25 to May 8. The team assessed the progress made under the home-grown economic reforms, which are supported by the IMF Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements, totaling US$918 million (about K3.6 billion). Sedik, speaking on behalf of the IMF, announced that the IMF staff and the authorities of Papua New Guinea have reached a staff-level agreement on the policies necessary to complete the second reviews of the ECF and EFF arrangements. These agreements are now subject to approval by the Executive Board of the IMF.
"Papua New Guinea’s economic outlook remains positive," Sedik remarked. "Growth is anticipated to rise to 4.6 per cent in 2024 from 2.9 per cent in 2023, driven by the resurgence of activities at the Porgera gold mine and favorable commodity prices. High-frequency economic indicators suggest a limited macroeconomic impact of the social unrest experienced in January 2024." He continued, "Inflation is projected to normalize towards its historical average of around five per cent. Gross international reserves stood comfortably at US$3.9 billion (approximately K15 billion) at the end of 2023, providing ample space to continue implementing central banking reforms." Sedik expressed satisfaction with the performance under the Fund-supported programs, noting, "The Government is making significant strides in implementing its structural reform agenda, with a focus on advancing budget repair, modernizing central banking, and enhancing governance. All quantitative performance criteria and indicative targets set for December 2023 were met, and most structural benchmarks due by end-March 2024 were implemented." He concluded by stating, "The authorities’ commitment to reform is yielding positive outcomes, including a reduction in the fiscal deficit, which will bolster public debt sustainability." The approval of further financial support from the IMF reflects confidence in Papua New Guinea's economic trajectory and underscores the nation's commitment to implementing crucial reforms aimed at fostering sustainable growth and development. Also read Comments are closed.
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