ADB Forecasts that the national economy is expected to maintain solid momentum
The Asian Development Bank (ADB) forecasts that Timor-Leste's “economy is expected to maintain solid momentum,” “supported by strong domestic demand” and “by a low-inflation environment,” according to the Asian Development Outlook (ADO), released on September 30th, 2025.
The report projects economic growth of 3.8% in 2025 and 3.4% in 2026, reflecting the positive performance recorded in 2024, when the country achieved higher-than-expected preliminary growth of 4.1%. According to the ADB, “Timor-Leste’s near-term economic outlook remains stable, supported by strong domestic demand”.
The organization highlights that “Improved budget execution, sustained credit growth in the banking sector, and steady remittance inflows will continue to underpin economic growth, supported by a low-inflation environment”. “Inflation is projected to remain low, averaging 1.2% in 2025 and 1.9% in 2026, revised down from previous estimates of 2.9% and 2.6% respectively, due to easing food prices and subdued price pressures on goods and services”.
Stefania Dina, the Director of ADB for Timor-Leste, states that “Timor-Leste’s accession to ASEAN in October 2025 will mark a significant milestone that will strengthen confidence and drive sustainable, long-term economic growth by unlocking new opportunities in trade, investment, and private sector development”.
The outlook presented by the ADB, although slightly lower, is in line with the projections of the Government of Timor-Leste, which, in its General State Budget Proposal for 2026, currently under consideration by the National Parliament, estimates non-oil GDP growth of 4.5% in 2025 and 2026. 
According to government forecasts, growth will be driven by continued expansion in the private sector, improved execution of public spending and stronger household consumption, associated with higher public spending on goods and services, better execution of investments and stimulation of the private sector, reinforced by Timor-Leste's accession to ASEAN and expanded access to credit.
The budget proposal, under the theme ‘Investing in National Transformation, Regional Integration and Inclusive Development” presents a total consolidated budget of US$2.291 billion for 2026.
Both the ADB and the Government's forecasts thus point to a stable and sustainable growth trajectory, underpinned by prudent public finance management, economic recovery and regional integration, factors that should boost confidence and open new development opportunities for Timor-Leste.
