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publication October 13, 2017

October 2017 Timor-Leste Economic Update: Economy Slows during Election Year


Tom Perry/ World Bank

Key findings:

  • Well-run Presidential and Parliamentary elections in 2017 have supported confidence, but public spending has slowed with the government in caretaker mode over the election period.
  • The economy is expected to have grown by 5.7 percent in 2016, but slowed to 2.4 percent growth in 2017, recovering to 4.2 percent in 2018.
  • Exports showed strength in 2016 and the early part of 2017. Coffee exports continued to increase, by 20 percent in 2016, and international visitor arrivals grew.
  • Trends in growth remain led by the public sector, although there have been  some substantial private sector investments over 2016. To further support private sector development, the government could address constraints to doing business, such as basic financial frameworks, contract enforcement, secure land leasing and bankruptcy legislation.
  • Oil production is ceasing, leading to a fiscal deficit. Petroleum Fund balance has declined from US$16.5 billion at end 2014 to US$15.8 billion at end 2016.