Dili, April 10, 2025 (Média Democracia) – The Asian Development Bank (ADB) has presented a positive outlook for Timor-Leste’s economic growth, projecting an average annual growth rate of 3.9% from 2025 to 2026.
This growth is expected to be driven by strong consumer demand and expansionary fiscal policy, according to the latest report released by the ADB.
“In the main economic report, Asian Development Outlook (ADO) April 2025, ADB forecasts that economic growth will reach 4.0% in 2025 before slightly declining to 3.8% in 2026. These growth rates are higher than the historical average, mainly supported by increased capital investment, private consumption, and service delivery,” said ADB Country Director Estefani Dina at the ADB building in Farol on Wednesday (09/04).
The Director noted that these forecasts were finalized before the United States government’s announcement of new tariffs on April 2, 2025.
As a result, the projections only consider the effects of tariffs already in place before the announcement. However, the ADO April 2025 report includes an analysis of the potential impact of these new tariffs on economic growth in Asia and the Pacific.
“Timor-Leste’s economic growth is expected to accelerate, driven by domestic demand and improved budget execution, making it one of the most promising prospects going forward,” she said.
She emphasized that public development spending is essential to build resilience and unlock economic potential.
“To sustain this momentum, investment in human capital through strategic public spending and long-term development is crucial. This will help Timor-Leste achieve sustainable growth, increase resilience, and unlock its full potential,” she added.
She also noted that inflation is expected to remain low at 2.8% in 2025–2026 due to moderation in food and global commodity prices, as well as only minor price increases in goods and services with limited bargaining power. The current account deficit is expected to widen, particularly due to increased imports.
“Risks to Timor-Leste’s growth outlook include natural disasters, extreme weather conditions, fluctuations in trade due to global geopolitical uncertainties, and escalating trade tensions,” she explained.
Challenges also remain in the form of limited public capital investment execution and weak public service delivery.
The Asian Development Bank is a multilateral development bank that supports sustainable, inclusive, and resilient growth across Asia and the Pacific. It works closely with its members and partners to tackle complex development challenges.
The ADB leverages innovative financial tools and strategic partnerships to transform lives, develop high-quality infrastructure, and safeguard the planet. It was established in 1966 and currently has 69 member countries, including 49 from the Asia-Pacific region.
Report : Estefania
Photo : Estefani