The latest IMF country report for February 2022 notes "debt levels are at dangerously high levels and set to increase further as overspending leads to deficits which are in turn, externally financed".
"Macroeconomic vulnerabilities stem from PNG's elevated public debt level: the debt sustainability analysis confirms that PNG remains at high risk of debt distress."
Former Prime Minister Peter O'Neill said the IMF report "somewhat contradicted an economic update brought to Parliament by Treasurer Ian Ling-Stuckey recently", The National newspaper reported.
O'Neill said the damning report revealed the true state of the PNG economy and how the country's finances were being managed.
"Our country's debt has now increased three-fold, according to the IMF, and with the deficit increasing further than expected for 2021 because of over-spending and 2022 looking to exceed K6 billion, it is no wonder the IMF are very worried about PNG's economic position," he said.
"The report also noted the lack of transparency and reporting of Covid-19-related funds."
The report stated that "Covid-19 -related procurement, including posting details of beneficial owners of successful bidders has not been updated since mid-2020."
O'Neill said: "There are too many contradictions between the Treasurer's [Ian Ling-Stuckey's] glowing report of the economy and the IMF's fact-based assessment.
"But one I would like to point out is the use of the temporary advance facility. This is being abused by Government to print money. It must come to a stop and the government, as the IMF rightly points out, needs to repay to the Bank of PNG what has been borrowed.
"I encourage the government, particularly the Treasurer, to speak truthfully about the state of the economy as our people have a right to know the extent of the damage that has been done in three short years.
"I also encourage the IMF and multilateral and bilateral partners of our country to be timely in their assessments and reporting as it has been over two years since the last assessment was done when PNG borrowed $263 million."