The Governor of the Bank of Papua New Guinea, Ms. Elizabeth Genia, today presented the Bank’s March 2026 Outlook on the Economy, Inflation and Monetary Policy, outlining recent economic developments, the outlook for inflation, and the latest decisions of the Monetary Policy Committee (MPC).
Governor Genia said Papua New Guinea’s economy continues to record steady growth with moderate inflation, although global developments are contributing to a more uncertain international environment.
Domestic growth for 2025 has been revised upward to 5.3 percent, largely reflecting stronger LNG and mineral production. For 2026, growth is projected to moderate to around 3.0 percent, representing a return to a more sustainable pace of expansion following the strong rebound in 2025.
Governor Genia noted that the recent escalation of conflict in the Middle East has introduced significant uncertainty into the global economic outlook, with disruptions to maritime transport through the Strait of Hormuz contributing to higher global energy prices.
“Higher energy prices would feed directly into global inflation at a time when central banks in many advanced economies have only recently brought inflation back toward target,” Governor Genia said.
Annual headline inflation was 4.1 percent in the December quarter, with core measures of trimmed mean and exclusion-based inflation at 1.8 percent and 0.7 percent respectively. The Bank projects headline inflation of around 4 percent in 2026, with core inflation expected to remain within the 2.5 to 3 percent range over the medium term.
The Monetary Policy Committee assessed that current policy settings remain appropriate in light of the economic outlook.
“Overall, the Committee judged that the current monetary policy settings are consistent with a broadly neutral stance and remain appropriate given contained underlying inflation and steady economic activity,” Governor Genia said.
Governor Genia also addressed Papua New Guinea’s recent placement on the Financial Action Task Force (FATF) grey list, noting that reforms are underway to strengthen the country’s anti-money laundering and counter-terrorism financing framework.
“Grey listing does not mean Papua New Guinea is sanctioned or unsafe to do business,” she said. Looking ahead, Governor Genia said Papua New Guinea is entering a period of heightened global uncertainty from a position of relative resilience.
“Inflation remains contained, our reserves are adequate, and the financial system is stable. The Bank will continue to monitor developments closely and adjust policy settings if required to maintain price stability.”
The Bank reaffirmed its commitment to independence, transparency and continued engagement with the private sector and development partners.