The Treasurer’s recent statement places Papua New Guinea’s public debt at PGK 65.5 billion as of December 2025. This figure, while already substantial, only reflects on-budget central government debt. When broader obligations are included, Papua New Guinea’s true debt exposure may already exceed PGK 100 billion.
The official debt represents approximately 52–55% of GDP, based on current growth estimates. This aligns with the government’s medium-term fiscal thresholds, but masks the extent of the country’s total financial obligations. When liabilities held by state-owned enterprises (SOEs), unfunded superannuation contributions, and off-budget infrastructure commitments are factored in, the overall fiscal picture becomes more concerning.
Recent unofficial estimates suggest that SOEs collectively carry liabilities of at least PGK 20 billion, with some institutions reliant on government guarantees or cash injections to remain operational. While not all SOE debt is explicitly government-backed, much of it presents contingent fiscal risks in the event of default, insolvency, or underperformance.
In addition, the government’s flagship infrastructure program, Connect PNG, is estimated to have already pre-committed between PGK 6–10 billion in contracts, much of it financed through forward-leaning financing structures or deferred payments. These obligations, while not fully reflected in official debt figures, represent real liabilities that will require future budget allocations or financing.
Another significant burden is the estimated PGK 2 billion in unfunded employer superannuation contributions owed to Nambawan Super, a matter of ongoing concern for public sector retirees and the broader financial system. The unresolved liability not only threatens pension system stability but also undermines confidence in public sector employment.
Combined with other off-balance-sheet exposures, infrastructure guarantees, and concessional loans with long grace periods, PNG’s effective sovereign liability may already be well above the PGK 100 billion threshold — a level that could exceed 85% of GDP, depending on definitions and accounting standards used.
While the government continues to pursue fiscal consolidation and improve revenue collection, weak institutional capacity, limited transparency, and governance risks hamper effective debt oversight. The true extent and structure of the country’s liabilities remain opaque, complicating efforts to assess debt sustainability and long-term fiscal health.
Papua New Guinea is not alone in facing rising debt burdens. But in a context of low absorptive capacity, a narrow revenue base, and reliance on volatile commodity exports, the margins for error are slim. Without stronger public financial management, enhanced SOE oversight, and greater fiscal transparency, the country risks entering a period of unsustainable debt accumulation — with significant implications for development financing and macroeconomic stability.