Democratic Republic of Timor-Leste: 2010 Article IV Consultation—Staff Report; Joint World Bank/IMF Debt Sustainability Analysis; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Timor-Leste
IMF Staff Country Reports, March 8, 2011
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- Democratic Republic of Timor-Leste: 2010 Article IV Consultation—Staff Report; Joint World Bank/IMF Debt Sustainability Analysis; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Timor-Leste
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Bibliographic details
- Published: March 8, 2011
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781455219933.002
Overview
- The Timorese economy has improved owing to high oil-financed public spending and a rebound in agriculture, non-oil growth.
- Despite high bank deposit growth, private sector credit has remained stagnant.
- The medium-term outlook for growth is positive.
- Timor-Leste’s key challenge remains to use its petroleum wealth wisely to build a strong non-oil economy and raise living standards.
- Improvements in financial management and budget execution will be important.
- Productivity-enhancing structural reforms and efforts to build labor skills would improve competitiveness in non-oil industries and services.
Key findings
- High oil-financed public spending contributed to economic improvement.
- Agriculture experienced a rebound that supported non-oil growth.
- Bank deposits grew strongly while private sector credit stagnated.
- The medium-term outlook is characterized as positive.
Main challenges
- Using petroleum wealth wisely to build a strong non-oil economy.
- Raising living standards across the population.
- Strengthening financial management and budget execution.
- Enhancing productivity through structural reforms.
- Building labor skills to improve competitiveness in non-oil industries and services.
Policy recommendations
- Improve financial management and budget execution to ensure efficient use of oil-financed resources.
- Implement productivity-enhancing structural reforms to support non-oil sectors.
- Invest in labor-skill development to raise competitiveness in non-oil industries and services.
- Prioritize policies that convert petroleum wealth into sustainable non-oil economic growth and higher living standards.
International Monetary Fund. Democratic Republic of Timor-Leste: 2010 Article IV Consultation—Staff Report; Joint World Bank/IMF Debt Sustainability Analysis; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Timor-Leste (March 8, 2011).