DILI, 30 June 2025 (TATOLI) – The Government of Timor-Leste has approved a budget expenditure ceiling for the 2026 fiscal year, with a planned total spending of US$1.85 billion.
“The overall indicative expenditure ceiling for the 2026 State Budget has been set at US$1.85 billion,” the Government said in a statement.
The distribution of the aggregate ceiling for the Central Administration Budget in the 2026 State Budget is based on the strategic sectors defined by the Government Program and the Strategic Development Plan, with 36% being allocated to the Institutional Framework Sector, 28% to the Social Capital Sector, 28% to Infrastructure Development, 7% to Economic Development and 1% to Good Governance and Combating Corruption.
Compared to the 2025 State Budget of US$2.6 billion, the upcoming fiscal year’s budget reflects a substantial reduction in public spending, marking a significant decrease from last year’s allocation. The US$750 million decrease represents a 28.8% reduction in total expenditure.
The sharp decrease in public spending for the upcoming fiscal year is part of a broader effort to enhance fiscal discipline, promote more efficient use of public resources, and better align expenditures with national development priorities and available revenues.
Minister of Finance, Santina José Rodrigues F. Viegas Cardoso presented an economic growth forecast of 2.7 per cent of GDP for 2026, in a context of budgetary consolidation, after an estimated growth of 4.3 per cent in 2025. The inflation rate continues a downward path, expected to reach 1.8% in 2025 and to stabilize at around 2% over the next five years.
“The timetable for the budget process establishes the distribution of the disaggregated ceiling to the entities on July 4th, the submission of ministerial proposals by July 24th, the meetings of the Budget Review Committee between August 4th and 20th, and the delivery of the GSB 2026 proposal to the National Parliament by October 1st, 2025,” the statement read.
TATOLI
