DILI, 10 April 2026 (TATOLI) — Timor-Leste’s economic growth outlook is solid, with the economy projected to grow by 4.0% on average annually in 2026 and 2027, driven by private consumption, public and private investments, and broadly positive expectations, according to a new report by the Asian Development Bank (ADB).
In its flagship economic report, Asian Development Outlook (ADO) April 2026, ADB forecasts solid growth at 3.8% in 2026 before accelerating to 4.1% in 2027 in an early stabilization scenario of the conflict in the Middle East and therefore the forecasts remain uncertain. Robust domestic demand, driven by public spending on capital projects, transfers, and goods and services, along with bank lending and inflows from remittances and tourist arrivals, will continue to support growth.
ADB Country Director for Timor-Leste, Stefania Dina said that deeper ASEAN integration—supported by reforms at home will strengthen Timor-Leste’s growth in the years ahead by attracting investment and boosting trade.
“By putting ASEAN economic agreements into action, speeding up reforms, and supporting small and medium businesses with targeted investment and trade programs, Timor-Leste can build a stronger private sector and create more opportunities for its people,” she said.
Inflation is forecast to increase gradually, averaging 1.9% in 2026–2027, driven by higher import prices. The current account deficit is projected to widen, mainly due to higher imports.
Risks to Timor-Leste’s growth outlook primarily stem from the conflict in the Middle East, which could keep international oil prices elevated. This would raise the cost of imported fuel and other goods, intensify inflationary pressures and constrain economic growth. Additional vulnerabilities may arise from disasters caused by natural hazards and the slow implementation of public capital investment projects.
ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.
Journalist: Camilio de Sousa
Editor: Filomeno Martins
