The Bank of Papua New Guinea (BPNG) has outlined key economic priorities focused on maintaining price stability, reforming the foreign exchange market, strengthening the financial sector and improving economic governance as Papua New Guinea faces a more challenging global environment.

Presenting the Bank’s 2026 Economic Outlook in Port Moresby today, Governor Elizabeth Genia said the economy remained resilient, supported by strong mineral and non-mineral activity, higher export earnings, and improved foreign exchange conditions.

The Bank initially projected economic growth at 3.0 percent in 2026, following estimated growth of 5.3 percent in 2025, driven largely by stronger LNG and mineral production. Growth is also expected from agriculture, fisheries, forestry, financial services, telecommunications, transport, and government infrastructure spending.

However, Governor Genia warned that higher global energy and food prices, imported inflation and weaker demand for commodity exports could create new risks for the domestic economy.

Price stability remains BPNG’s primary objective. The Bank initially projected headline inflation at about 4.0 percent, while maintaining the Kina Facility Rate at 5.0 percent and the Cash Reserve Requirement at 9.0 percent.

Foreign exchange reform remains another major priority, including the gradual adjustment of the Kina towards a market-clearing level, restoration of full convertibility and development of an interbank foreign exchange market.

BPNG reported international reserves of about US$4.1 billion, providing approximately seven months of total import cover and 11 months of non-mineral import cover.

The Bank is also prioritizing reforms to strengthen Papua New Guinea’s anti-money laundering and counter-terrorism financing framework following the country’s placement on the FATF grey list. An action plan covering 18 milestones and 23 government agencies is being implemented.

BPNG says the grey listing does not mean PNG is sanctioned or unsafe for business, but greater scrutiny of international transactions could increase costs and delays for businesses.

The Bank is also focusing on financial inclusion, banking-sector resilience, payments infrastructure, private-sector engagement and stronger communication with businesses and other stakeholders.

The latest assessment has become more challenging, with BPNG revising its 2026 growth forecast to 3.5 percent, while raising the inflation forecast to 5.0 percent, reflecting higher global commodity prices, exchange-rate effects and domestic production costs.

The Governor’s outlook therefore points to a broader reform agenda aimed at protecting price stability, strengthening the financial system and foreign exchange market, and converting PNG’s strong resource earnings into sustainable and broader-based economic growth.

The event was held at the Royal Papuan Yacht Club, and attended by the country's major Banking Institutions, Financial Institutions and other major economic partners and stakeholders.