Democratic Republic of Timor-Leste: 2024 Article IV Consultation-Press Release; Staff Report

Timor-Leste has made impressive progress since independence but remains a fragile post-conflict nation with an under-diversified private sector. The economy remains highly dependent on the public sector, which has been financed primarily by proceeds from the Petroleum Fund, in which the state has invested its substantial savings from past oil and gas production. But production is dwindling and large withdrawals from the PF, should they continue, would lead to its full depletion by the end of the 2030s. Over the past decade, a high share of public spending relative to the economy has delivered only modest growth and development.