[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111555-en":3,"doc-seo-111555-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},111555,1099514068035,"Ezra","https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c",8,"Research & Report","Papua New Guinea - Joint Bank-Fund Debt Sustainability Analysis - Debt distress risk assessment","Papua New Guinea remains at high risk of debt distress under the Low-Income Country Debt Sustainability Framework due to weak debt-carrying capacity and elevated external liquidity risks. Liquidity pressures stem from a 2028 Eurobond bullet payment and higher early forecast bilateral and multilateral debt service, while domestic vulnerabilities include persistent PV of overall debt-to-GDP breaches. Fiscal consolidation is expected to reduce vulnerabilities, but trade-related, contingent liabilities, and climate shocks create downside risk. Conditional sustainability depends on implementation and conservative financing.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nManuela Francisco and Lalita Moorty (IDA) , and Thomas Helbling and Stefania Fabrizio (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF)  \n\n| PAPUA NEW GUINEA: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | High |\n| Overall risk of debt distress | High |\n| Granularity in the risk rating | Sustainable |\n| Application of judgment | No |\n\nPapua New Guinea (PNG) remains at high risk of debt distress under the Low-Income Country Debt Sustainability Framework (LIC-DSF), with weak debt-carrying capacity.1 ,2 External debt risks are elevated due to liquidity risk associated with the bullet payment on the existing Eurobond in 2028 and higher official bilateral and multilateral debt service payments in the first half of the forecast horizon. Domestic debt vulnerabilities are also elevated contributing to persistent breaches of the PV of overall debt to GDP ratio. The planned fiscal consolidation helps address debt vulnerabilities, while the risks of external and overall public debt distress are assessed as high. Over the medium-term, public debt would trend downward, while the breaches of liquidity indicators can be addressed by debt management operations and enhanced revenue generation. The Debt Sustainability Analysis (DSA) suggests that PNG is susceptible to trade-related and contingent liabilities shocks, as well as climate change, underscoring downside risks to the public debt outlook. Fiscal consolidation, structural reforms fostering private sector growth, and climate-related adaptation and mitigation measures would lower the risk of public debt distress and support sustainability. Conditional  \n1 This DSA has been prepared jointly by the International Monetary Fund and the World Bank, in accordance with the LICDSF, approved by the Executive Boards of the IMF and the International Development Association.  \n2 The Composite Indicator (CI) of 2.57 is based on the latest available information—October 2024 IMF World Economic Outlook (WEO) and the World Bank’s Country Policy and Institutional Assessment (CPIA) for 2023 indicating a “weak”capacity to carry debt.  \non the implementation of the authorities’ planned fiscal consolidation and conservative financing strategies, public debt is assessed as sustainable.  \n1. The coverage of public debt in the DSA is unchanged from the previous (November 2024) DSA (Text Table 1) . The segments of the public sector captured in the DSA include the central government, state and local government, and guarantees to other entities in the public and private sector, including parts of state-owned enterprises (SOEs) .3 However, debt numbers do not fully capture implicit government guaranteed debts of SOEs and unfunded superannuation liabilities relating to pensions.4 Given continued difficulties in capturing and assessing SOE risks, a contingent liabilities stress test is included in this DSA, assuming 9 percent of GDP as SOE debt is not captured in official public debt data (the stock of explicit government guarantees is around 1.3 percent of GDP), and 3 percent of GDP for other elements of general government (mainly unfunded superannuation liabilities related to pensions, which are estimated to be close to 2 percent of GDP in 2024) . Separately, according to the World Bank’s PPP database, the PPP capital stock in PNG is zero and, therefore, no default shock is triggered. A financial market shock of 5 percent is added, reflecting the average fiscal cost of financial crisis in low-income countries. With these assumptions , the cumulative shock in the contingent liabilities stress test amounts to 17 percent of GDP—compared to 7 percent under default assumptions. Currency is used to define external debt, while there is no material difference with the currency denomination criteria in PNG.  \n\n|  |  |  |  |  |\n| --- | -","cbCaiiilNzaKRyWK","https://ap.wps.com/l/cbCaiiilNzaKRyWK","pdf",732277,1,24,"English","en",105,"# Risk of Debt Distress\n## External and overall public debt risk assessment\n## Contingent liabilities and stress testing assumptions\n## Mitigation measures and medium-term outlook","[{\"question\":\"What is the assessed risk level for external and overall debt distress in Papua New Guinea?\",\"answer\":\"Both the external debt distress risk and the overall risk of debt distress are assessed as high under the LIC-DSF.\"},{\"question\":\"Why are external debt risks elevated for Papua New Guinea?\",\"answer\":\"They are elevated due to liquidity risk tied to the 2028 Eurobond bullet payment and higher official bilateral and multilateral debt service in the first half of the forecast horizon.\"},{\"question\":\"How does the contingent liabilities stress test estimate missing SOE and pension-related liabilities?\",\"answer\":\"It assumes 9 percent of GDP of SOE debt is not captured in official public debt data, and adds 3 percent of GDP for other general-government elements, mainly unfunded superannuation liabilities related to pensions.\"}]",1784490657,60,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"papua-new-guinea-joint-bank-fund-debt-sustainability-analysis-debt-distress-risk-assessment","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/papua-new-guinea-joint-bank-fund-debt-sustainability-analysis-debt-distress-risk-assessment/111555/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-20","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What is the assessed risk level for external and overall debt distress in Papua New Guinea?","Question",{"text":75,"@type":76},"Both the external debt distress risk and the overall risk of debt distress are assessed as high under the LIC-DSF.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"Why are external debt risks elevated for Papua New Guinea?",{"text":80,"@type":76},"They are elevated due to liquidity risk tied to the 2028 Eurobond bullet payment and higher official bilateral and multilateral debt service in the first half of the forecast horizon.",{"name":82,"@type":73,"acceptedAnswer":83},"How does the contingent liabilities stress test estimate missing SOE and pension-related liabilities?",{"text":84,"@type":76},"It assumes 9 percent of GDP of SOE debt is not captured in official public debt data, and adds 3 percent of GDP for other general-government elements, mainly unfunded superannuation liabilities related to 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