IMF approves staff-monitor programme

THE International Monetary Fund (IMF) managing director Kristalina Georgieva has approved a staff-monitored programme for PNG, covering the period from Feb 20 to June 30, 2021.
A statement from the IMF said PNG faced “deep macroeconomic imbalances”.
“The country’s economy has been hit by a series of shocks, including lower commodity prices, a severe drought in 2015-2016 and the earthquake in 2018,” the statement said.
“These shocks have undermined growth and revealed vulnerabilities in public finances and macroeconomic management.
“Government revenues have stagnated, public deficits have widened and State-owned enterprises losses have materialised, leading to a sharp increase in the ratio of public debt to GDP.
“At the same time, shortages of foreign exchange have inhibited investment and growth in the non-resource sector.”
It said the Government that assumed office in 2019 “is committed to addressing these imbalances, removing structural distortions currently undermining economic growth, clearing the backlog of foreign exchange orders and restoring the convertibility of the Kina”.
“The authorities have adopted a comprehensive reform programme to address structural rigidities in the economy, while also taking steps to address macroeconomic imbalances,” it said.
“Structural reforms include the implementation of a medium-term revenue strategy, comprehensive reform of State-owned enterprises and steps to address problems of governance and corruption.”