Democratic Republic of Timor-Leste: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Democratic Republic of Timor-Leste

Timor-Leste’s financial buffers and favorable demographics provide an opportunity to develop its economy. Despite impressive progress since independence, the economy remains under-diversified, while fiscal and external imbalances are large. The Petroleum Fund’s (PF) balance stood at 939 percent of non-oil GDP in 2024, making Timor-Leste’s Net Foreign Asset position one of the highest in the world as a share of the domestic economy. But oil and gas production has ceased and large withdrawals from the PF to finance fiscal deficits, should they continue, would lead to its full depletion by the end of the 2030s. Timor-Leste has one of the youngest populations in the Asia-Pacific region, holding promise for future growth.