Papua New Guinea's (PNG's) economy remains resilient, driven by strong export earnings, improved foreign exchange availability, and continued investment despite ongoing economic challenges.
This is according to the latest Westpac Wailis June 2026 PNG Economic Update and Outlook report, stating that the economy remained resilient in the first half of 2026.
The report says PNG is still on track for real GDP growth of around 4.6 per cent in 2026, following an estimated growth of 5.5 per cent in 2025. This is supported by strong activity in agriculture, industry and services, firm import demand, mining and LNG export earnings, and better foreign exchange liquidity.
Westpac Pacific Senior Economist Shamal Chand said PNG has managed global shocks better than expected, helped by fuel price support, stronger resource earnings, and continued activity outside the resource sector.
“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.
Growth is being driven by activity in provincial centres, including the Highlands, where retail, industry and services are benefiting from internal migration, urbanisation and stronger local demand. Westpac says import activity also remains firm, showing continued consumer spending and capital investment.
Foreign exchange conditions have also improved, with typical order clearing times reducing from several weeks to just days. Westpac says this has helped businesses and supported private sector lending, while demand for Government securities remains strong.
Inflation remains relatively low at the national level, with headline CPI at 2.24 per cent in the March quarter. However, price pressures remain uneven, with higher increases recorded in the Highlands and some regional centres.
PNG’s export base remains an important support. LNG export volumes reached about 3.73 million tonnes year to date to May 2026, while gold exports to Australia reached K6.51 billion year to date to April, up 30 per cent from the same period in 2025. Cocoa and coffee have also supported rural households, with cocoa export earnings reaching K1.80 billion in 2025 and coffee earnings rising to K1.31 billion.
Major projects remain central to PNG’s medium-term growth. The report highlights Papua LNG, Wafi-Golpu, K92 Mining’s Kainantu expansion, the Agogo tie-in gas development, Connect PNG, port and airport redevelopments, and other infrastructure projects as important drivers of future activity.
Westpac says the outlook remains positive, but PNG still needs to manage risks from global energy markets, commodity price movements, inflation pressure, fiscal constraints, major project delivery and ongoing compliance reforms.
