Papua New Guinea: Requests for an Arrangement under the Extended Credit Facility and an Extended Arrangement under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for the Papua New Guinea

This paper presents Papua New Guinea’s Requests for an Arrangement under the Extended Credit Facility (ECF) and an Extended Arrangement under the Extended Fund Facility (EFF). The 38-month arrangement will support Papua New Guinea’s reform agenda, which seeks to help protect the vulnerable and foster inclusive growth. The reforms will focus on strengthening debt sustainability, alleviating foreign exchange shortages, and enhancing governance and operationalizing the anti-corruption framework. The medium-term outlook is positive: there are good prospects of new investments in the resource sector, which would boost growth, exports, and fiscal revenue collection. The ECF/EFF arrangements will help address balance of payment needs and rebuild the buffers needed to facilitate a gradual and orderly return to greater exchange rate flexibility. The program will also go toward financing the budget, thereby supporting the authorities’ ambitious fiscal consolidation plans while avoiding a disruptive adjustment. It is also expected to play a catalytic role with other development partners. Given the institutional and technical capacity constraints faced by the authorities, reform measures supported by the program are streamlined, focused, and will be carefully sequenced. Timely capacity development and advice from the IMF will support reform implementation throughout the duration of the program.