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publication May 22, 2019

April 2019 Timor-Leste Economic Report: Moving Beyond Uncertainty

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Key findings:

  • GDP declined for a second consecutive year, owing to political and economic uncertainty.
  • Public spending constrained until (late) approval of 2018 budget, with strong increase in the last 3months of the year
  • Current account improved due to higher primary income. Trade deficit eased as imports declinded and exports increased.
  • Positive outlook for 2019, with GDP forecast to grow by 3.9% and inflation to remain below 4%.
  • The sustainability of fiscal and external deficits remain key medium-term concerns - despite recent trends.
  • Agriculture remains a critical sector, but productivity is low and investments have been insufficient to expand production.

"With the approval of the 2019 state budget in February, we expect an economic recovery to take place. GDP is forecast to grow by 3.9 percent under a scenario of greater political and economic stability. Increased government spending, coupled with stronger private consumption, will steer economic recovery.¡±"
Pedro Martins
Senior Country Economist for Timor-Leste