Díli, Oct. 6, 2025 (Lusa) - The Government of Timor-Leste forecasts that non-oil Gross Domestic Product (GDP) will grow by 4.5% this year and in 2026, compared to 4.1% in 2024, according to the state budget proposal submitted to parliament.

"In 2025, non-oil GDP is expected to grow by 4.5%, which would represent the highest growth rate in more than a decade. This forecast is based on expected improvements in budget execution for 2025, the latest available trade data and analysis of available GDP indicators," the document states.

For 2026, the Timorese government forecasts that GDP growth will continue to grow at 4.5%.

The economic outlook of the Government of Timor-Leste is more optimistic than that of the International Monetary Fund, which forecasts growth of 3.9% in 2025 and 3.3% in 2026, and the World Bank, which forecasts average growth of 3.7% between 2025 and 2027.

According to the Timorese government, growth in 2025 should be driven by growth in public spending, increased household consumption and private investment.

The growth forecast for 2026 is based on the continuation of government reforms and economic integration into the Association of Southeast Asian Nations (ASEAN), scheduled for the next 26 October, as well as increased household and public consumption.

"Despite potential new trade opportunities through ASEAN, the trade balance is expected to worsen in the short term, as a significant portion of consumer spending will continue to be directed towards imports," the state budget proposal notes.

Inflation averaged 0.2% from January to August 2025 and is projected to average 0.5% for the year as a whole.

MSE/AYLS // AYLS

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