Dili, Sept. 12, 2025 (Lusa) - The Timorese economy is expected to grow moderately in 2025, supported by public spending, consumption and an increase in credit, according to the Central Bank of Timor-Leste's (BCTL) mid-term economic review.
In the report, released on Thursday, the BCTL maintains its forecast for non-oil gross domestic product (GDP) growth in 2025 at 4.4%, "driven by public spending, household consumption and modest private investment".
The mid-term economic review predicts that public consumption will increase by 11.9% and public investment by 14.5%, due to infrastructure construction projects such as roads and bridges.
Household consumption, according to the BCTL, is growing by 3.6%, stimulated by the increase in wages, public transfers, remittances and credits, and private investment is showing "signs of recovery" due to the effect of public investment.
The construction sector is the main beneficiary.
However, growth remains limited due to the increase in imports - almost 12% - which will lead to a worsening trade deficit.
'The current account deficit widened to $279.1 million [€237.8 million] in the first half of 2024, 66.2% more than in 2024, reflecting the increase in imports and the closure of the Bayu-Undan oil and gas field in June 2025,' points out the BCTL.
The economic review also points out that inflation has fallen “significantly, averaging around 0.1%”, leading to an improvement in purchasing power and household confidence.
'For 2025 as a whole, inflation is expected to average around 0.5%, before rising to 1.2% in 2026,' the document reads.
The report also states that domestic revenue totalled $124.7 million (€106.29 million) in the first half of 2025, attributed to improved tax collection; however, transfers from the Petroleum Fund continue to be the main budgetary pillar.
For the BCTL, the country continues to "face persistent deficits, dependence on oil revenues and limited dynamism in the private sector".
In the report, the Timorese central bank recommends increasing domestic production, diversifying the economy, as well as the need to ensure fiscal sustainability for "long-term stability and to achieve the foundations of economic resilience and sustainability".
MSE/ADB // ADB.
Lusa
