Kina Bank has delivered a positive but cautious outlook for Papua New Guinea’s economy in 2026, highlighting the need for strong regulation, capital markets development, and close cooperation between government and business.
Kina Bank CEO and Managing Director Ivan Vidovich stated that during the Prime Minister’s Back to Business Breakfast in Port Moresby on Tuesday 03rd February in Port Moresby.
Mr. Vidovich noted that global uncertainty continues to affect markets, but PNG remained resilient throughout 2025. He said geopolitical developments around the world are shaping trade flows, while Australia’s strengthening economy, and US dollar weakness could affect the Kina–Australian dollar exchange rate.
“With the Australian dollar trading around US$0.70 against a weakening US dollar, further interest rate rises in Australia could push the PGK/AUD closer to 0.30 this year,” he said. “Given PNG’s reliance on Australian imports, we expect imported inflation to rise. Even so, we anticipate GDP growth of around 4% in 2026, in line with trends in the Asia–Pacific.”
He also noted that global gold prices – with recent trading above US$5,000 per ounce – provide a welcome boost for PNG’s export earnings and foreign exchange reserves.
Kina continues to see steady demand for credit across multiple sectors, including retail and wholesale, agriculture, construction, and logistics. He acknowledged the Government’s efforts to strengthen fiscal management, progress reforms, and improve revenue collection, along with the work of the Bank of Papua New Guinea and the Internal Revenue Commission.
Mr. Vidovich also addressed Kina’s position as it awaits the Financial Action Task Force’s Grey‑Listing decision.
“We are well prepared, and we don’t expect major impacts to our strategy or operations,” he said. “But some external stakeholders may take a cautious approach.”
Kina Bank also advised it was working collaboratively with regulators, to broaden domestic investment opportunities through the development of PNG’s capital markets. Under the country’s updated capital markets laws. Mr. Vidovich said this would be a major step in developing PNG’s financial system.
“In line with our established track record as PNG’s challenger bank, we’re also focusing on how banks can help grow stronger and more diverse capital markets. This shows our confidence in the regulatory reforms and our commitment to creating more local investment opportunities,” he said.
Kina Bank CEO and Managing Director Ivan Vidovich deliver his speech at Back to Business Breakfast.