National Interest Statement: 2023 Loan Agreement between the Commonwealth of Australia and the Independent State of Papua New Guinea
This Statement relates to the Loan Agreement between the Commonwealth of Australia and the Independent State of Papua New Guinea (PNG) for A$600 million, signed on 8 December 2023.
This loan is provided in response to a request from PNG Prime Minister, Hon James Marape MP. The loan supports PNG to meet its 2023 Budget financing shortfall. The loan also supports the delivery of reform actions under PNG’s International Monetary Fund Extended Credit Facility and Extended Fund Facility Program.
Background and history
PNG’s economic outlook for 2023 shows stabilisation from the pandemic.
In 2023, the PNG economy is projected to grow at 3.0 per cent. However, many challenges remain from inflationary pressures, a slowing global economy, and a weak fiscal position.
This loan builds upon the support Australia provided to PNG in 2020, 2021 and 2022 to help with budget repair efforts and support the delivery of reform actions.
Australia and PNG are sovereign partners who share unique and enduring connections underpinned by a special bilateral relationship including the Comprehensive Strategic and Economic Partnership.
It is in Australia’s interests to have an economically stable partner with sustainable fiscal management.
More information on Australia’s partnership with Papua New Guinea is available on the Department of Foreign Affairs and Trade website.
This Statement is being tabled pursuant to the requirements of sections 8D-8E of the International Monetary Agreements Act 1947 (IMA Act).
Under the IMA Act, the Treasurer is required to release and table in the Parliament a statement that describes the nature and terms of an agreement entered into by Australia to provide financial assistance to another country, and that details why such an agreement is in Australia’s national interest.