## IMF Staff Completes 2023 Article IV Mission to Timor-Leste

_IMF News, November 29, 2023_

## Source details

**Canonical URL:** [IMF Staff Completes 2023 Article IV Mission to Timor-Leste](https://www.imf.org/en/news/articles/2023/11/29/pr23411-imf-completes-2023-article-iv-mission-to-timor-leste)

## Other formats

- [Markdown version](/en/news/articles/2023/11/29/pr23411-imf-completes-2023-article-iv-mission-to-timor-leste/index.md)
- [Structured JSON version](/en/news/articles/2023/11/29/pr23411-imf-completes-2023-article-iv-mission-to-timor-leste/index.json)
- [Bundle manifest](/en/news/articles/2023/11/29/pr23411-imf-completes-2023-article-iv-mission-to-timor-leste/bundle-manifest.json)

## Bibliographic details
- Published: November 29, 2023

---

### Macroeconomic outlook and key statistics
- Growth is expected to slow to 1.5 percent in 2023.
- Growth is expected to recover to 3.5 percent in 2024, supported by the new government’s prioritization of public capital expenditure.
- Inflation will average 8 percent in 2023.
- Inflation is expected to ease to 2.5 percent in 2024.
- Visit dates for the Article IV discussions: November 15-27.
- Press Release No. 23/411; publication date: November 29, 2023.

### Assessment and near-term risks
- Principal near-term downside risks to growth:
  - The abrupt onset of a global recession.
  - Heightened commodity price volatility.
- Potential fiscal consequences of adverse shocks:
  - Could require a fiscal response, posing obstacles to expenditure restraint.
  - Could adversely affect the Petroleum Fund’s balance.
- Political commitment to rationalize public expenditure would reduce uncertainty surrounding the medium-term outlook.

### Fiscal stance and recommendations
- Central fiscal message:
  - Excessive and poor-quality public spending risks depleting the wealth saved in the Petroleum Fund.
  - Public expenditure should be reduced and its quality improved.
  - Further prioritize spending on human and physical capital.
  - Shift the composition of spending to support growth and protect the vulnerable.
- Revenue and fiscal framework:
  - Domestic revenues should be gradually mobilized from a low base.
  - A medium-term fiscal framework should underpin efforts by setting a clear roadmap to fiscal sustainability.
- Specific 2024 budget observation:
  - The draft 2024 budget includes a welcome expansion of capital spending.

### Structural reforms to boost growth and diversification
- Recommended reform priorities:
  - Remove bottlenecks in the agriculture and tourism sectors.
  - Foster digitalization to boost productivity.
  - Address legal constraints that hinder business operations and financial development.
- Objective:
  - Develop a vibrant private sector to achieve sustained improvements in living standards.

### Financial sector and central bank role
- The central bank’s focus:
  - Developing the financial sector, including through the provision of digital financial services.
- Complementary actions needed:
  - Improvements to the legal and regulatory framework to boost prudent lending to the private sector.

### IMF engagement and mission interactions
- IMF team lead: Mr. Yan Carrière-Swallow.
- Statement highlights:
  - The IMF stands ready to provide capacity development and other support to assist the government’s reform efforts.
- Stakeholder consultations during the mission included:
  - Minister of Finance Santina Viegas Cardoso.
  - Central Bank Governor Hélder Lopes.
  - Minister of Petroleum and Mineral Resources Francisco da Costa Monteiro.
  - Secretary of State for Vocational Education and Training Rogério Araújo Mendonça.
  - Other senior officials, development partners, the private sector, civil society.
  - Staff from the World Bank also joined the discussions.

*Press Release No. 23/411, November 29, 2023 — IMF Staff Completes 2023 Article IV Mission to Timor-Leste*

---


## References

- [Democratic Republic of Timor-Leste and the IMF](http://www.imf.org/external/country/TLS/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2023/11/29/pr23411-imf-completes-2023-article-iv-mission-to-timor-leste_