Papua New Guinea has entered the second half of 2026 in a stronger economic position than anticipated at the start of the year, supported by elevated commodity prices, stronger resource-sector activity and ongoing International Monetary Fund (IMF)- backed reforms.

This according to Westpac’s latest WAILIS PNG Economic Update and Outlook in which the report notes that PNG’s headline macroeconomic picture remains encouraging, with the economy benefiting from higher export earnings, improved activity across both mineral and non-mineral sectors and continued government infrastructure spending through the Connect PNG programme.

Westpac Pacific Senior Economist Shamal Chand noted that PNG’s headline position is encouraging, but the benefits of growth need to reach more people. 

“PNG is benefiting from stronger commodity prices, improved resource-sector activity and IMF-backed reforms,” Mr. Chand said.

“The bigger task now is making sure growth supports livelihoods, service delivery and broader economic resilience.”

The report highlights that the Bank of Papua New Guinea (BPNG) maintained the Kina Facility Rate at 5.0%, while the kina continued to depreciate under a crawl-like exchange rate regime. 

In 2026 year-to-date, the exchange rate moved from 0.2352 to 0.2267, a decline of around 3.6%.

Westpac notes that FX conditions have improved, although remaining FX queues and central bank auctions show the market is not yet fully market-clearing.

Formal employment grew by 2.4% in 2025, mainly driven by hiring in mining and resources.

However, Westpac emphasized that the formal employment remains small compared to PNG’s informal economy, reinforcing the need for better data to understand livelihoods and household condition.