[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111082-en":3,"doc-seo-111082-105":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},111082,1099513958762,"Logic","https://ap-avatar.wpscdn.com/avatar/1000023916a998db790?x-image-process=image/resize,m_fixed,w_180,h_180&k=1784791008015729253",8,"Research & Report","Papua New Guinea - Joint Bank-Fund Debt Sustainability Analysis","Papua New Guinea remains at high risk of debt distress under the Low-Income Country Debt Sustainability Framework, reflecting weak debt-carrying capacity. Despite planned fiscal consolidation, both external and public debt distress risks are still assessed as high, while the medium-term path shows public debt trending downward. Temporary sustainability breaches can largely be addressed through debt management and stronger revenue generation. The analysis finds sensitivity to trade-related and contingent liability shocks, requiring gradual consolidation and structural reforms to support private sector growth.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nLalita Moorty and Manuela Francisco (IDA) and Sanjaya Panth and Jarkko Turunen (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 While the planned fiscal consolidation helps address debt vulnerabilities exacerbated by the global COVID-19 shock, the risk of both external and public debt distress continues to be assessed as high. Over the medium-term, public debt enters a downward trend and the projected temporary breaches of sustainability indicators can mostly be addressed by debt management operations as well as improvements in revenue generation. The Debt Sustainability Analysis (DSA) suggests that PNG is susceptible to trade-related and contingent liabilities shocks, underscoring downside risks to the debt outlook in a global environment of high uncertainty. To lower the risk of debt distress and ensure debt sustainability, gradual fiscal consolidation, including by boosting revenues, and steadfast structural reforms to promote private sector growth would be needed. Conditional on the implementation of the authorities’ plans for further fiscal consolidation and conservative financing strategies , PNG’s external and overall debt is judged as sustainable.  \n1 This Debt Sustainability Analysis has been prepared jointly by the International Monetary Fund and the World Bank, in accordance with the revised Debt Sustainability Framework for low-income countries approved by the Executive Boards of the IMF and the International Development Association.  \n2 The Composite Indicator (CI) of 2.56 is based on the latest available CI information—April 2023 IMF World Economic Outlook (WEO) and the World Bank’s Country Policy and Institutional Assessment (CPIA) for 2021 indicating a “weak” capacity to carry debt.  \n1. The coverage of public debt in the DSA is unchanged from the previous (March 2023) DSA  \n(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) . However, debt numbers do not fully capture implicit government guaranteed debts of SOEs and unfunded superannuation liabilities relating to pensions.3 For the purposes of this DSA, the coverage of public sector debt remains unchanged from the last DSA, which was prepared in March 2023 in the context of the IMF ECF/EFF program request. 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 projected to be 2.1 percent of GDP in 2023) . 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 denomination is used to define external debt.  \n\n|  |  |  |  |\n| --- | --- | --- | --- |\n|  |  | \u003Cbr>Subsect","cbCaim0iTbsPG4pB","https://ap.wps.com/l/cbCaim0iTbsPG4pB","pdf",764603,1,21,"English","en",105,"# Risk assessment and overall judgment\n## External and overall risk of debt distress\n## Granularity and use of judgment\n# Debt outlook and policy implications\n## Medium-term debt trajectory and breach management\n## Shock sensitivity: trade-related and contingent liabilities\n# Contingent liabilities stress test\n## Assumptions on SOE debt and other elements\n## PPP default shock and financial market shock","[{\"question\":\"How is Papua New Guinea’s risk of debt distress assessed under the LIC DSF?\",\"answer\":\"Papua New Guinea is assessed as being at high risk of external debt distress and high overall risk of debt distress due to weak debt-carrying capacity.\"},{\"question\":\"What helps address projected temporary breaches of sustainability indicators?\",\"answer\":\"The analysis indicates that most temporary breaches can be managed through debt management operations and improvements in revenue generation alongside planned fiscal consolidation.\"},{\"question\":\"Why does the report emphasize contingent liabilities shocks?\",\"answer\":\"The Debt Sustainability Analysis shows PNG is susceptible to trade-related and contingent liability shocks, creating downside risks for the debt outlook under high uncertainty.\"}]",1784488493,53,{"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","",{"@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/111082/",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},"How is Papua New Guinea’s risk of debt distress assessed under the LIC DSF?","Question",{"text":75,"@type":76},"Papua New Guinea is assessed as being at high risk of external debt distress and high overall risk of debt distress due to weak debt-carrying capacity.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"What helps address projected temporary breaches of sustainability indicators?",{"text":80,"@type":76},"The analysis indicates that most temporary breaches can be managed through debt management operations and improvements in revenue generation alongside planned fiscal consolidation.",{"name":82,"@type":73,"acceptedAnswer":83},"Why does the report emphasize contingent liabilities shocks?",{"text":84,"@type":76},"The Debt Sustainability Analysis shows PNG is susceptible to trade-related and contingent liability shocks, creating downside risks for the debt outlook under high 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