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publication November 7, 2021

Timor-Leste - Public Expenditure Review : Changing Course - Towards Better and More Sustainable Spending

Timor-Leste Public Expenditure Review

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The Timor-Leste Public Expenditure Review (PER) aims to support the Government of Timor-Leste in identifying key constraints to efficient and effective public spending and offer ways to improve the spending quality to achieve the country’s development objectives.

Key Findings

  • Accelerating and sustaining economic growth is key to reduce poverty and raise living standards in Timor-Leste. 
  • High public expenditure levels with limited domestic revenues brings a large budget deficit which threaten fiscal sustainability and endanger macroeconomic stability. 
  • Domestic revenues are very low by international standards and need to be improved.  
  • The government expenditure levels have been among the highest in the world over the past decade. 
  • Enhancing the efficiency and effectiveness of public spending is essential to improve the impact of fiscal policy. 
  • An increase in health spending over the years has enabled critical investments in the health sector but it has not translated into markedly better service availability and quality. 
  • Increasing the efficiency and effectiveness of public expenditure will be crucial to improve the provision of health and nutrition services and create fiscal space for more productive spending. 
  • Significant efforts have been made to rebuild the education system and improve access to education, but the spending on education has not translated into commensurate improvements in learning outcomes. 
  • Improving the allocative and technical efficiency of public spending on education would help boost learning outcomes.