Papua New Guinea has entered the second half of 2026 in a stronger economic position than expected at the start of the year, according to Westpac’s latest WAILIS PNG Economic Update and Outlook.
The growth was driven by higher commodity prices, stronger resource-sector activity and continued economic reforms, the report said.
The report said PNG’s headline economic position remained encouraging, with higher export earnings, increased activity across mineral and non-mineral sectors and continued Government infrastructure spending through the Connect PNG programme.
However, Westpac said maintaining reform momentum would be critical to ensuring stronger economic growth translates into improved livelihoods, service delivery and broader economic resilience.
Westpac Pacific Senior Economist Shamal Chand said the economic outlook was encouraging, but the benefits of growth needed to reach more Papua New Guineans.
“PNG is benefiting from stronger commodity prices, improved resource-sector activity and IMF-backed reforms. The bigger task now is making sure growth supports livelihoods, service delivery and broader economic resilience,” Mr. Chand said.
The report noted that the Bank of Papua New Guinea maintained the Kina Facility Rate at 5.0 per cent, 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, representing a decline of about 3.6 per cent.
Westpac said foreign exchange conditions had improved, although remaining FX queues and central bank auctions showed the market was not yet fully market-clearing.
Formal employment grew by 2.4 per cent in 2025, mainly driven by increased hiring in the mining and resources sector.
However, Westpac noted that formal employment remained small compared with PNG’s large informal economy, reinforcing the need for better economic data to understand livelihoods and household conditions.