{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation for Timor-Leste",
  "publication": "IMF News, September 26, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/09/25/pr-25315-timor-leste-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Timor-Leste. Growth is estimated to have risen to 4.1 percent in 2024, supported by fiscal expansion and strong credit growth. Inflation declined from 8.4 percent in 2023 to 2.",
  "publishDate": "2025-09-26",
  "sections": [
    {
      "heading": "Growth and inflation outcomes (2023–2024; May 2025)",
      "content": "- Growth is estimated to have risen to 4.1 percent in 2024, supported by fiscal expansion and strong credit growth.\n- Inflation declined from 8.4 percent in 2023 to 2.1 percent in 2024, driven by moderating global food prices and the rollback of tax hikes.\n- Inflation fell further to -0.2 percent y/y in May 2025."
    },
    {
      "heading": "Outlook and projections (2025–2026)",
      "content": "- Growth projections:\n  - 2025: 3.9 percent (supported by a strong fiscal impulse and continued rapid credit growth).\n  - 2026: 3.3 percent (ASEAN accession begins to support growth through stronger FDI inflows and non-oil exports, but is more than offset by the expected drag from fiscal policy).\n- Inflation projections:\n  - Averaging 0.9 percent in 2025.\n  - Averaging 1.8 percent in 2026.\n  - Inflation is expected to rise modestly in the second half of 2025 as global food prices rise.\n- Risks to the outlook are described as balanced."
    },
    {
      "heading": "Executive Board assessment and priorities",
      "content": "- Key Board concerns:\n  - Cessation of oil production in 2025.\n  - Substantial fiscal and external imbalances.\n- Urgent priorities:\n  - Gradual fiscal consolidation to avoid depletion of the Petroleum Fund and secure fiscal and external sustainability.\n  - Growth-enhancing structural reforms to promote economic diversification.\n- Positive developments welcomed:\n  - Timor-Leste’s WTO accession and forthcoming accession to ASEAN, expected to boost trade and attract more foreign investment."
    },
    {
      "heading": "Fiscal policy, revenue, and public spending",
      "content": "- Directors’ recommendations:\n  - Improve composition and quality of public spending.\n  - Gradually enhance revenue mobilization.\n  - Restrain recurrent spending; reduce untargeted transfers; contain the public wage bill.\n  - Prioritize investments in human capital and high-quality capital projects.\n  - Implement VAT by 2027 and strengthen tax administration and compliance.\n  - Carefully manage risks associated with the Greater Sunrise gas field development.\n  - Fully implement ongoing reforms to public financial management and procurement to improve budget discipline and spending efficiency."
    },
    {
      "heading": "Financial sector and structural reforms",
      "content": "- Financial system observations:\n  - The financial system remains shallow despite strong credit growth in recent years.\n  - Systemic risks are limited but rapid credit growth warrants close monitoring and supervision.\n- Recommended actions:\n  - Accelerate issuance of land titles.\n  - Develop a national digital ID to address structural impediments to lending and support growth.\n  - Address AML/CFT framework deficiencies.\n  - Advance structural reforms to boost private sector development, enhance financial inclusion, and support sustainable growth.\n  - Continue efforts to strengthen governance and the rule of law.\n  - Strengthen vocational training to help unlock the demographic dividend.\n- Capacity development:\n  - Directors welcomed ongoing capacity development projects and noted continued engagement with the Fund would support Timor-Leste’s reform agenda."
    },
    {
      "heading": "Selected economic and financial indicators (exact figures as reported)",
      "content": "- Non-oil GDP at current prices (2024): US$1.947 billion\n- Non-oil GDP per capita (2024): US $1,399\n- Population (2024): 1.392 million\n- Quota: SDR 25.6 million\n\n- Real sector (annual percent change)\n  - Real Non-oil GDP:\n    - 2022: 4.0\n    - 2023: 2.4\n    - 2024: 4.1\n    - 2025: 3.9\n    - 2026: 3.3\n    - 2027: 3.2\n    - 2028: (table continues)\n  - Real Non-oil GDP per capita:\n    - 2022: 2.2\n    - 2023: 1.3\n    - 2024: 3.0\n    - 2025: 2.6\n    - 2026: 2.0\n    - 2027: 1.9\n    - 2028: 1.8\n    - 2029: 1.7\n\n- CPI (annual average)\n  - 2022: 7.0\n  - 2023: 8.4\n  - 2024: 2.1\n  - 2025 (proj.): 0.9\n- CPI (end-period)\n  - 2022: 6.9\n  - 2023: 8.7\n  - 2024: -0.4\n\n- Central government operations (in percent of Non-oil GDP)\n  - Revenue:\n    - 2022: 58.3\n    - 2023: 50.7\n    - 2024: 48.9\n    - 2025: 45.4\n    - 2026: 42.4\n    - 2027: 39.5\n    - 2028: 36.6\n    - 2029: 33.9\n    - 2030: 31.4\n  - Domestic revenue:\n    - 2022: 12.0\n    - 2023: 13.1\n    - 2024: 12.2\n    - 2025: 11.9\n    - 2026: 12.1\n    - 2027: 12.3\n  - Estimated Sustainable Income (ESI):\n    - 2022: 33.1\n    - 2023: 27.2\n    - 2024: 26.8\n    - 2025: 26.5\n    - 2026: 24.1\n    - 2027: 21.8\n    - 2028: 19.5\n    - 2029: 17.2\n    - 2030: 15.0\n  - Grants:\n    - 2022: 13.2\n    - 2023: 10.4\n    - 2024: 9.9\n    - 2025: 6.7\n    - 2026: 6.4\n    - 2027: 5.7\n    - 2028: 5.1\n    - 2029: 4.6\n\n  - Expenditure:\n    - 2022: 114.7\n    - 2023: 90.8\n    - 2024: 94.0\n    - 2025: 97.0\n    - 2026: 92.5\n    - 2027: 90.1\n    - 2028: 87.9\n    - 2029: 85.5\n    - 2030: 83.3\n  - Recurrent:\n    - 2022: 90.6\n    - 2023: 68.6\n    - 2024: 66.7\n    - 2025: 73.3\n    - 2026: 69.6\n    - 2027: 67.9\n    - 2028: 66.2\n    - 2029: 64.6\n    - 2030: 63.0\n  - Net acquisition of nonfinancial assets:\n    - 2022: 10.9\n    - 2023: 11.8\n    - 2024: 17.4\n    - 2025: 16.9\n    - 2026: 16.5\n    - 2027: 16.3\n    - 2028: 16.1\n  - Net lending/borrowing:\n    - 2022: -56.4\n    - 2023: -40.1\n    - 2024: -45.0\n    - 2025: -51.5\n    - 2026: -50.1\n    - 2027: -50.6\n    - 2028: -51.2\n    - 2029: -51.6\n    - 2030: -51.8\n\n- Money and credit (annual percent change)\n  - Deposits:\n    - 2022: 8.6\n    - 2023: 2.5\n    - 2024: 7.3\n    - 2025: 6.8\n    - 2026: 6.2\n    - 2027: 6.1\n  - Credit to the private sector:\n    - 2022: 34.5\n    - 2023: 20.6\n    - 2024: 31.8\n    - 2025: 22.6\n  - Lending interest rate (percent, end of period):\n    - 2022: 11.0\n    - 2023: 10.7\n    - 2024: 10.5\n\n- Balance of payments (in percent of Non-oil GDP)\n  - Current account balance:\n    - 2022: 24.3\n    - 2023: -9.8\n    - 2024: -29.0\n    - 2025: -31.8\n    - 2026: -32.3\n    - 2027: -32.7\n    - 2028: -33.3\n    - 2029: -33.7\n    - 2030: -33.9\n  - Trade of Goods:\n    - 2022: 60.4\n    - 2023: -7.8\n    - 2024: -33.0\n    - 2025: -40.9\n    - 2026: -40.2\n    - 2027: -39.4\n    - 2028: -38.4\n    - 2029: -37.5\n  - Exports of goods:\n    - 2022: 107.3\n    - 2023: 35.1\n    - 2024: 10.1\n    - 2025: 4.8\n    - 2026: 3.7\n    - 2027: 3.4\n    - 2028: 3.6\n  - Imports of goods:\n    - 2022: 46.9\n    - 2023: 42.9\n    - 2024: 43.1\n    - 2025: 45.8\n    - 2026: 43.8\n    - 2027: 43.2\n    - 2028: 42.6\n    - 2029: 41.8\n    - 2030: 41.1\n  - Trade of Services:\n    - 2022: -26.3\n    - 2023: -18.1\n    - 2024: -16.6\n    - 2025: -16.7\n    - 2026: -16.5\n    - 2027: -16.4\n    - 2028: -15.5\n    - 2029: -14.5\n    - 2030: -13.6\n  - Primary Income:\n    - 2022: -18.7\n    - 2023: 11.2\n    - 2024: 14.1\n    - 2025: 12.8\n    - 2026: 12.9\n    - 2027: 9.1\n    - 2028: 7.4\n  - Secondary Income:\n    - 2022: 8.9\n    - 2023: 4.9\n    - 2024: 11.5\n    - 2025: 9.8\n  - Overall balance:\n    - 2022: -6.1\n    - 2023: -2.7\n    - 2024: -2.2\n    - 2025: 1.2\n    - 2026: 1.6\n    - 2027: 1.5\n\n- Public foreign assets (in months of imports)\n  - 2022: 169.0\n  - 2023: 195.7\n  - 2024: 183.5\n  - 2025: 160.7\n  - 2026: 150.1\n  - 2027: 135.3\n  - 2028: 122.3\n  - 2029: 109.6\n  - 2030: 96.9\n\n- Exchange rates\n  - NEER (2010=100, period average):\n    - 2022: 156.2\n    - 2023: 161.0\n    - 2024: 163.5\n  - REER (2010=100, period average):\n    - 2022: 159.3\n    - 2023: 170.3\n    - 2024: 172.7\n\n- Memorandum items\n  - Fiscal impulse (percentage point of non-oil GDP):\n    - 2022: -7.4\n    - 2023: 22.1\n    - 2024: -4.6\n    - 2025: -6.2\n    - 2026: 3.8\n  - Nominal Non-oil GDP (in millions of U.S. dollars):\n    - 2022: 1,676\n    - 2023: 1,802\n    - 2024: 1,947\n    - 2025: 2,079\n    - 2026: 2,208\n    - 2027: 2,343\n    - 2028: 2,485\n    - 2029: 2,637\n    - 2030: 2,797\n  - Nominal Non-oil GDP per capita (in U.S. dollars):\n    - 2022: 1,231\n    - 2023: 1,309\n    - 2024: 1,399\n    - 2025: 1,475\n    - 2026: 1,547\n    - 2027: 1,620\n    - 2028: 1,695\n    - 2029: 1,773\n    - 2030: 1,854\n    - (annual percent change): 5.4; 6.3; 5.5; 4.7\n\n  - Petroleum Fund balance (in millions of U.S. dollars):\n    - 2022: 17,273\n    - 2023: 18,288\n    - 2024: 18,274\n    - 2025: 17,746\n    - 2026: 17,054\n    - 2027: 16,145\n    - 2028: 15,133\n    - 2029: 14,022\n    - 2030: 12,807\n  - Petroleum Fund balance (in percent of Non-oil GDP):\n    - 2022: 1,031\n    - 2023: 1,015\n    - 2024: 939\n    - 2025: 853\n    - 2026: 772\n    - 2027: 689\n    - 2028: 609\n    - 2029: 532\n    - 2030: 458\n\n  - Public debt (in percent of Non-oil GDP):\n    - 2022: 15.1\n    - 2023: 14.4\n    - 2024: 13.8\n    - 2025: 14.2\n    - 2026: 14.7\n    - 2027: 14.6\n\n  - Population growth (annual percent change):\n    - 2022: 1.1\n    - 2023: 1.4\n\nIMF Executive Board press release, September 26, 2025.\n\n---\n\n\n References\n\n- Democratic Republic of Timor-Leste and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/09/25/pr-25315-timor-leste-imf-executive-board-concludes-2025-article-iv-consultation"
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    "Published: September 26, 2025",
    "Growth is estimated to have risen to 4.1 percent in 2024, supported by fiscal expansion and strong credit growth.",
    "Inflation declined from 8.4 percent in 2023 to 2.1 percent in 2024, driven by moderating global food prices and the rollback of tax hikes.",
    "Inflation fell further to -0.2 percent y/y in May 2025.",
    "Growth projections:",
    "Inflation projections:",
    "Risks to the outlook are described as balanced.",
    "Key Board concerns:",
    "Urgent priorities:",
    "Positive developments welcomed:",
    "Directors’ recommendations:",
    "Financial system observations:",
    "Recommended actions:",
    "Capacity development:",
    "Non-oil GDP at current prices (2024): US$1.947 billion",
    "Non-oil GDP per capita (2024): US $1,399",
    "Population (2024): 1.392 million",
    "Quota: SDR 25.6 million",
    "Real sector (annual percent change)",
    "CPI (annual average)",
    "CPI (end-period)",
    "Central government operations (in percent of Non-oil GDP)",
    "Money and credit (annual percent change)",
    "Balance of payments (in percent of Non-oil GDP)",
    "Public foreign assets (in months of imports)",
    "Exchange rates",
    "Memorandum items",
    "[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/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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