Papua New Guinea (PNG) comprises the eastern half of the island of New Guinea, the second largest island in the world. While larger than, for example, Germany, much of the country is steep and rugged mountains or swamp. PNG is one of the most culturally diverse countries in the world – over 800 different languages are spoken in the nation of over 8 million people. Most of the population lives in rural and remote areas, where access to government services and the formal monetized economy remains a challenge. Frequently occurring natural disasters and the effects of climate change also present challenges. There is an enclaved mining sector; the rest of the economy is based around agriculture, forestry and fisheries, and associated commerce and services. The country has a sound financial system and a stable political environment with a recent change in government in Parliament in May 2019. The new government remains committed to prudent macroeconomic management and is grateful for Fund support.