East Timor economy expands at ‘satisfactory’ rate

President of East Timor Taur Matan Ruak

Economic activity in East Timor is expanding at a “satisfactory” pace that is expected to continue in 2017, said the International Monetary Fund (IMF) in a statement released on Monday in Washington.

The IMF said, however, that Timorese economic development in the medium term will depends on the ability to diversify, given that most of the oil wells currently in operation are expected to be exhausted by 2020.

An IMF team, led by Yu Ching Wong, visited Timor-Leste from October 24 to 28 in order to assess recent economic developments and analyze government policies, and held meetings with the Minister of Finance, with the vice-governors of the Timor-Leste Central Bank and held meetings with representatives of the private sector and civil society.

“Public investment should be carried out more effectively by focusing on projects with higher returns, determined by rigorous evaluation of each of these projects,” a strategy that “would ensure more effective Oil Fund spending,” according to Yu Ching Wong.

The IMF says that real non-oil Gross Domestic Product (GDP) is expected to grow 5 percent this year, supported by public expenditure and that prices will fall 0.6 percent, with the balance of trade changing from a surplus to a deficit of 9.9 percent of GDP, “largely due to the strong increase in imports related to the increase in public investment.”

The budget deficit this year will be 13.9 percent of GDP, with the increase in expenditure financed by additional withdrawals from the Oil Fund. MDT/Macauhub