09 March 2011

IMF report discusses critical economic issues

The IMF has just released its annual report on Timor-Leste's economy and financial management, dubbed the Staff Report for the 2010 Article IV Consultation. This year's edition is more than 70 pages long, and includes a Debt Sustainability Analysis co-authored with the World Bank.

The IMF reached different conclusions than the Government about a number of things in "the most oil-dependent economy in the world," including forecasts of non-oil GDP and advisable levels of public spending. They wrote that "Large uncertainties surround the medium-term outlook, including the path of oil prices and production, the magnitude and quality of public spending, and progress in business-enabling structural reforms." They observed that "spending at a slower-than-planned pace, consistent with the absorptive capacity of the economy, would stand a better chance of realizing high quality projects and crowding in private investment."

The report includes a statement conveying the Government's dissenting views.

As the IMF website can be difficult to access, La'o Hamutuk has copied the documents to our site. You can download the complete report (1.3 MB), which includes the following documents:
The IMF report relates to several important issues which La'o Hamutuk works on, including the 2011 State Budget, borrowing, the Strategic Development Plan and revising the Petroleum Fund Law. We will continue to analyze and publish about its observations and recommendations.

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