Prime Minister Kay Rala Xanana Gusmão submitted, today, May 15th, 2026, to the President of the National Parliament, Maria Fernanda Lay, a proposal for the first amendment to Law No. 8/2025 of November 27th, regarding the General State Budget for 2026 (2026 GSB). The document was submitted in the presence of the Minister of Finance, Santina José Rodrigues F. Viegas Cardoso; the Vice Minister of Finance, Regina de Jesus; and the Vice Minister for Parliamentary Affairs, Adérito Hugo da Costa. 
The supplementary budget, approved by the Council of Ministers at its meeting on May 13th, provides for adjustments to the 2026 GSB to address the rise in international fuel prices linked to the conflict in the Middle East, the costs associated with Timor-Leste’s assumption of the Pro Tempore Presidency of the Community of Portuguese-Speaking Countries (CPLP – acronym in Portuguese), following the approval of the 2026 GSB, and expenses related to the Special Administrative Region of Oe-Cússe Ambeno (RAEOA – acronym in Portuguese).
With this adjustment, the consolidated amount for the 2026 GSB increases by US$101.1 million, bringing the total to US$2.39 billion.
The increase in the budget is not due to an increase in transfers from the Petroleum Fund, but rather to a realignment of the government’s funding sources, using operating surpluses, available balances in non-operating bank accounts, and increased domestic revenue.
The proposal also aims to mitigate the economic impact of rising international fuel prices, given the country’s heavy reliance on imports—particularly of fuel and food products—which directly affects transport costs and domestic inflation.
According to projections by the Ministry of Finance, average annual inflation in 2026 is expected to rise to 2.2%, up from 1.2% in 2025, with no significant increase, thanks to measures adopted by the Government to stabilise fuel prices.
The law proposal will now be submitted to the National Parliament for consideration and debate.
