Papua New Guinea

Papua New Guinea (PNG) is the most linguistically diverse country in the world, with over 850 indigenous languages. It occupies the eastern part of the island of New Guinea, as well as the islands of New Britain, New Ireland, and the Autonomous Region of Bougainville, along with around 600 smaller islands and atolls. The country is rich in geographic and natural resources, including large reserves of valuable minerals, vast forests, plentiful freshwater and marine resources, and fertile agricultural land.

With a population of about 11.8 million, Papua New Guinea has a growing young demographic. The nation's rich culture is complex and deeply rooted in tribal and ethnic identities, as well as strong connections to the land. These factors present unique challenges but also contribute to the country’s remarkable resilience.

In 2025, Papua New Guinea will celebrate its 50th anniversary as an independent nation. This milestone also marks five decades of partnership with the World Bank, which has supported transformative progress in infrastructure, education, health, and economic resilience.

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Agriculture, forestry, and fishing employ the majority of Papua New Guinea’s labor force, with most workers in these sectors being employed informally. Meanwhile, minerals and energy extraction are the primary sources of export earnings and contribute significantly to the country’s GDP.

Despite modest overall economic growth in Papua New Guinea over the past 40 years, this has not translated into significant per capita income growth. According to the World Bank’s Country Economic Memorandum for Papua New Guinea, several factors have constrained growth, including macroeconomic volatility, low productivity growth, a heavy reliance on natural resources, and missed opportunities to leverage human capital fully.

To achieve stronger and more inclusive economic growth, Papua New Guinea needs to increase economic stability, enhance productivity, nurture human capital, improve gender equality and invest in physical infrastructure. This includes crucial electricity, telecommunications, and transportation improvements, which are vital for fostering private sector-led growth.

The World Bank’s Papua New Guinea Economic Update from June 2025 reported that the country’s fiscal performance has improved, with the deficit narrowing to 3.2 percent of GDP in 2024. However, risks remain, such as commodity price volatility, foreign exchange shortages, and threats related to climate change.

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The World Bank continues to support the government’s efforts to strengthen macroeconomic management and improve service delivery, ensuring that development benefits reach all people in Papua New Guinea (PNG), particularly the 85 percent of the population living in rural areas. This approach aligns with the Country Partnership Framework for Papua New Guinea, which is closely tied to the country’s development plans. The framework outlines three main focus areas:

1. Improving macroeconomic and fiscal resilience.
2. Providing more effective and inclusive services, especially in remote and underserved areas.
3. Diversifying the economy and creating jobs, including opportunities outside the natural resources sector.

The strategy emphasizes strengthening governance in both the natural resources and public financial management sectors to ensure that public resources are managed effectively and transparently. It aims to guarantee that all Papua New Guineans—regardless of gender, location, or socio-economic background—share equally in the benefits of the World Bank’s support for the country’s development goals.

The Australian and New Zealand governments also support the World Bank’s Pacific and Papua New Guinea initiatives through the Papua New Guinea and the Pacific Islands Umbrella Facility (PPIUF).

In partnership with the government, the World Bank supports 10 active projects across infrastructure, income and jobs, and social sectors in PNG, with total commitments amounting to USD $726 million (IBRD, IDA, and co-financing).

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The World Bank Group's new Country Partnership Framework (CPF) for Papua New Guinea (PNG) sets out a focused roadmap to support the country's ambition of creating one million jobs by 2027 and building a more resilient, diversified economy. Aligned with Papua New Guinea's Medium-Term Development Plan IV and national development vision, the framework focuses on private sector-led, job-focused growth while addressing long-standing gaps in human capital, connectivity, and economic governance.

PNG Country Partnership Framework (CPF) FY26-FY30

The CPF aims to promote resilient recovery and inclusive and sustainable growth. It focuses on three key areas: strengthening economic governance, enhancing competitiveness, and improving the quality of life. Additionally, it places renewed emphasis on job creation and climate resilience, which are now integral themes in all World Bank Group engagements.

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