The Asian Development Bank (ADB) forecasts an “economic growth of 3.8% in 2025 and 3.4% in 2026,” which is lower than its April projection of 4.0% growth for 2025 and 3.8% for 2026.
The document indicates that economic growth will be supported by more efficient budget execution, sustained credit growth in the banking sector, and a steady influx of remittances, facilitated by a low inflation environment.
The ADB projects that inflation will remain low, with an “average of 1.2% in 2025 and 1.9% in 2026,” due to decreasing food prices and moderate pressures on the prices of goods and services.
“The accession of Timor-Leste to ASEAN [Association of Southeast Asian Nations] in October 2025 will represent a significant milestone that will reinforce confidence and drive sustainable long-term economic growth by unlocking new opportunities in trade, investment, and private sector development,” stated ADB’s Director in Timor-Leste, Stefania Dina.
According to Stefania Dina, for Timor-Leste to fully benefit from regional integration, it is essential to “prioritize investments in human capital and infrastructure, improve the mobilization of domestic resources, implement fiscal reforms, and access long-term development financing.”
