Port Moresby – Prime Minister James Marape has reaffirmed his government’s commitment to ending Papua New Guinea’s reliance on external borrowing from 2027, following high-level discussions with leaders of the International Monetary Fund (IMF) and the World Bank held recently in Davos, Switzerland.
Prime Minister Marape said the meetings took place on the margins of the 56th World Economic Forum (WEF) Annual Meeting, where he met with IMF Managing Director Kristalina Georgieva and World Bank President Ajay Banga to discuss Papua New Guinea’s economic recovery pathway, fiscal discipline, and long term sustainability.
He said the discussions acknowledged the difficult but necessary economic reforms undertaken by his government since taking office, particularly in stabilising the economy, managing public debt, and restoring confidence in public financial management.
“The engagement with the IMF and the World Bank is about stabilisation, reform and putting Papua New Guinea back on a strong economic footing,” Prime Minister Marape said.
He made it clear that while concessional financing and technical support have been necessary during the recovery phase, his government has adopted a firm policy position that Papua New Guinea must stop borrowing beyond 2027.
“Our goal is clear. From 2027 onwards, Papua New Guinea should not be borrowing to fund its national budget,” the Prime Minister said.
Marape said his government is working towards a future where the country lives within its means, supported by improved domestic revenue collection, responsible expenditure, and growth from productive sectors including resources, agriculture, fisheries and downstream processing.
He said borrowing in previous years was unavoidable to stabilise the economy and meet pressing national obligations, but stressed that continued reliance on loans was not sustainable in the long term.
“The borrowing we have undertaken was to correct past economic imbalances and stabilise our finances. That phase must come to an end,” he said.
Papua New Guinea is currently implementing an IMF supported economic reform program aimed at restoring macroeconomic stability, strengthening fiscal management, improving revenue mobilisation and reducing debt vulnerabilities.
The program was adopted following years of fiscal pressure, foreign exchange shortages and rising public debt.
Under the program, the government has committed to expenditure controls, tax and revenue reforms, and improvements in governance and transparency, while maintaining spending on essential services.
The Prime Minister said discussions with Ms Georgieva and Mr Banga also focused on ensuring that economic reforms do not negatively impact ordinary Papua New Guineans, particularly in essential services such as health, education and law and order.
He reiterated that his government’s economic vision is anchored on home grown solutions, strengthening institutions, and ensuring Papua New Guinea derives greater value from its natural resources.
Prime Minister Marape said the government remains focused on restoring economic sovereignty and building a resilient economy for future generations.