Democratic Republic of Timor-Leste: 2024 Article IV Consultation-Press Release; Staff Report

IMF Staff Country Reports, December 17, 2024

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Canonical URL: Democratic Republic of Timor-Leste: 2024 Article IV Consultation-Press Release; Staff Report

Timor-Leste has made impressive progress since independence but remains a fragile post-conflict nation with an under-diversified private sector.
The economy remains highly dependent on the public sector, which has been financed primarily by proceeds from the Petroleum Fund.
Over the past decade, a high share of public spending relative to the economy has delivered only modest growth and development.
Petroleum production is dwindling; large withdrawals from the Petroleum Fund, should they continue, would lead to its full depletion by the end of the 2030s.

Primary fiscal financing source: proceeds from the Petroleum Fund in which the state has invested substantial savings from past oil and gas production.
Key fiscal vulnerability: ongoing large withdrawals from the Petroleum Fund risking full depletion by the end of the 2030s.
Public spending has been high relative to the economy for the past decade with limited growth payoff.

Subject tags listed for the report: Commodities, Debt sustainability analysis, Expenditure, External debt, Fiscal policy, Fiscal stance, Food prices, Government debt management, Inflation, Oil, Prices, Public debt, Public financial management (PFM).
Keywords provided: Debt sustainability analysis, Fiscal stance, Food prices, Government debt management, Inflation, Oil.

IMF Staff Country Reports. Democratic Republic of Timor-Leste: 2024 Article IV Consultation-Press Release; Staff Report. December 17, 2024.

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