Papua New Guinea’s economy has remained resilient despite global uncertainty and rising energy prices, according to a commercial bank report.
Westpac PNG bank has forecasted real economic growth of 4.6 per cent this year, driven by strong resource exports and expanding non-resource sectors.
Westpac’s latest PNG Economic Update and Outlook say the country has maintained steady economic momentum during the first half of 2026 and remains on course for solid growth following an estimated 5.5 per cent expansion in 2025.
The report attributes the positive outlook to continued strength in mining and LNG exports, improving foreign exchange conditions, steady import demand and stronger activity across agriculture, industry and services.
Westpac Pacific Senior Economist Shamal Chand said Papua New Guinea had weathered recent global economic shocks better than expected.
“PNG’s economy has shown good resilience despite external shocks. While global risks are still there, domestic demand, resource exports and non-resource activity continue to support growth,” Mr. Chand said.
The report identified energy security, improved foreign exchange liquidity, strong demand for Government securities and continued investment in infrastructure as key factors supporting the economy.
It also noted that although the Final Investment Decision for the Papua LNG project has been delayed, the project remains a significant contributor to the country’s long-term economic outlook.
According to Westpac, inflation remains relatively low, with the national Consumer Price Index rising by 2.24 per cent in the March quarter compared with the same period last year.
However, the report noted that inflationary pressures vary across the country, with the Highlands and several regional centers experiencing higher increases in the cost of living.
Westpac also reported a significant improvement in foreign exchange availability, with order clearing times falling from several weeks to only a few days.
The bank said continued exports of LNG, gold, cocoa and coffee were supporting national income while providing important earnings for rural communities.
Despite the positive outlook, the report cautioned that Papua New Guinea still faces challenges from volatile global energy markets, fluctuations in commodity prices, fiscal pressures, delays in major projects and ongoing reforms linked to the country’s placement on the Financial Action Task Force grey list.