IMF Forecasts Robust National Economic Growth in 2025
The International Monetary Fund (IMF) mission to East Timor, which took place between June 19th and July 2nd as part of the Article IV consultation, concluded that the country's economic growth should “remain robust” in 2025, “standing at 3.9%”, driven by “fiscal expansion and strong credit growth. In the final part of the mission, the chief of the IMF's technical team, Yan Carrière-Swallow, presented the preliminary conclusions, highlighting the opportunities and challenges facing the national economy.
“Timor-Leste's economy benefits from significant financial reserves and favourable demographics, factors that constitute an opportunity for its development,” said Yan Carrière-Swallow. . Despite the challenges still identified, the IMF highlights the “remarkable progress made since independence” and welcomes “Timor-Leste's efforts towards greater regional and global economic integration, through membership of the World Trade Organization (WTO) and future membership of ASEAN, initiatives that will boost growth and reinforce the Governments reform agenda”.
Projections point to average inflation of 0.9% in 2025, which should rise to 1.8% in 2026, after a sharp drop in 2024. For next year, the IMF predicts that economic growth will be around 3.3%, higher than the Government's estimate. It should also be noted that the government's economic growth forecast for 2025 is 4.3%.
The IMF also praised “the progress made in the financial sector reforms promoted by the Government - namely the creation of a legal framework for insolvencies, a law on securities guarantees, the development of corporate accounting standards and a new law on banking activities - the implementation of which will favour the development of the private sector.”
During the mission, the IMF team met with Finance Minister, Santina Cardoso, the Governor of the Central Bank, Hélder Lopes, various senior government officials, representatives of the private sector, civil society and development partners “On behalf of the IMF team, I would like to thank the Timorese authorities for their hospitality and excellent cooperation. The IMF remains available to support the government's reform and capacity building efforts," concluded Yan Carrière-Swallow.
