11/26/2018 | News release | Distributed by Public on 11/24/2018 18:49
Dili, November 26, 2018 - Economic growth in Timor-Leste is expected to accelerate to 3.3 percent in 2019 and 4.9 percent in 2020, according to a new World Bank report released here today. The October 2018 Timor-Leste Economic Report underscored that this rebound would be supported by stronger public spending, as well as renewed consumer and business confidence.
The twice-yearly report from the World Bank, which aims to provide ongoing analysis of the country's economy, highlighted that a strong decline in public spending weakened economic activity in 2017 and continued to affect growth in 2018. It projects that non-oil GDP will increase by 0.8 percent in 2018, compared to a contraction of 4.7 percent in the previous year. Construction, commerce and public services were likely the most affected sectors by the economic downturn.
'The outlook for 2018 remains relatively uncertain, partly depending on budget execution levels,' said Pedro Martins, Senior Country Economist for Timor-Leste. 'Approval of the 2019 budget is of critical importance, with economic growth expected to recover next year, underpinned by higher levels of public spending and private sector activity.'
The report notes consumer price inflation remains low at 2.6 percent and that the real exchange rate has been relatively stable. The current account balance improved as petroleum income increased and imports declined, but Petroleum Fund divestments have been required to finance trade and fiscal deficits.
The Timor-Leste Economic Report includes an in-depth analysis of areas for reform to reduce poverty and boost shared prosperity, in-line with Timor-Leste's national development goals. Key priority actions include improving education and skills and expanding productive sectors such as commercial agriculture, manufacturing and tourism.