Government holds Budgetary Days to prepare the 2027 General State Budget
Today, June 12th, 2026, in Dili, the Government, through the Ministry of Finance, held the Budgetary Days to prepare the 2027 General State Budget (GSB). The seminar brought together members of the Government, representatives of the National Parliament, public entities, municipalities, civil society, and other partners to analyse the country’s macroeconomic and fiscal context and to define priorities for the next fiscal year.
At the opening session, Prime Minister Kay Rala Xanana Gusmão noted that “the 2027 State Budget will be the first budget prepared under our 2027–2030 Medium-Term Planning Framework” and added that this budget will be instrumental for supporting the diversification of the non-oil economy, strengthening regional integration, and promoting more inclusive growth.
The Head of Government emphasised that “2027 State Budget will be guided by the theme “Strengthening Resilience through Transformation: Diversifying the Economy for a Sustainable Future”, and added that this vision “means transforming our resilience into investments in strategic productive sectors, quality infrastructure, connectivity and access to basic services and the strengthening of national human capital.”
During the proceedings, the country’s macroeconomic and fiscal outlook was presented, together with the results of the public consultations on the 2027 GSB, the 2027–2030 Medium-Term Plan, and the new budget preparation model set out in Decree-Law No. 42/2025 on the regulation of the Framework Law for the General State Budget. The new model introduces multi-year estimates and reinforces the prior definition of policy priorities and the assessment of the costs of proposals submitted by public entities.
The analyses presented highlighted the need to strengthen economic resilience, diversify productive sectors, increase domestic revenue, and ensure the sustainability of public finances, in a context where the economy remains heavily dependent on the Petroleum Fund.
In his speech, the Prime Minister emphasised the need to reform the budget-preparation process and said, “We must begin with an honest assessment of our current situation.” The Head of Government noted that “significant public resources have been utilised, yet the results for our citizens and for our economy have not advanced at the pace expected” and warned that “if we continue to rely on the old approach to budget preparation, we risk exhausting the Petroleum Fund without achieving the structural transformation that our people deserve”.
Addressing members of the Government and heads of State institutions, Kay Rala Xanana Gusmão called for greater discipline and selectivity in setting priorities, stating that “each ministry must be selective and strategic” and asking that “a limited number of high-impact initiatives” be identified.
The Prime Minister also argued that “We cannot continue a model of growth based solely on public expenditure without mobilising private investment, public-private partnerships and blended finance” and reiterated the need to direct resources towards investments “with clear and measurable outcomes.”
The national priorities for the 2027 GSB include economic diversification and the productive sectors; infrastructure and basic services; human capital development; improving the quality of public investment; strengthening national resilience; preparations for the 2027 CPLP Summit and the 2029 ASEAN Chairmanship; promotion of the private sector and digital transformation; fiscal sustainability; and strengthening the justice system.
In closing his remarks, the Prime Minister emphasised that “our citizens may not follow the details of this process, but they will feel its results,” and added that “The Timorese people deserve better infrastructure and services, greater employment and business opportunities and stronger protection against crises and disasters”.
The Budgetary Days mark the formal start of the process for preparing the 2027 General State Budget, the draft of which must be finalised and submitted to the National Parliament by October 1st, 2026.
