Timor-Leste.
Remains highly vulnerable to external and domestic shocks. Staff project growth of slightly
below 5 percent over the medium-term, well below potential or the 7-8 percent needed to address high levels of poverty and unemployment. The recent improvement of the security conditions could boost some recovery in private sector activity throughout 2008. Rising food and fuel prices increased inflation pressures during 2007. Annual inflation rose to 8.6 percent
in 2007, more than double the average inflation rate in 2006, boosted by higher food and fuel
prices. Although the banking system is sound, comprising only of branches of large foreign
banks the low loan quality continues to hamper the provision of new credit. The 2008 budget maintains the generally sound policy framework. Total expenditure is broadly unchanged and in line with the sustainable use of petroleum revenue. The new government has placed greater emphasis on meeting short-term needs with public transfers directed at, among others, refugees, veterans, and the elderly. However, weak administrative capacity continues to lead to poor budget execution. The offshore hydrocarbon sector has not been affected by the recent unrest and, therefore, Large oil/gas revenues continue to accrue. A robust and highly transparent framework for managing petroleum revenues is in place, including a petroleum fund. The Greater Sunrise oil/gas field (long-term revenue potential of about $10 billion) could commence production by 2014, although serious questions still remain about the project’s financial viability, and the feasibility of the government’s proposals for a refinery in Timor-Leste.
below 5 percent over the medium-term, well below potential or the 7-8 percent needed to address high levels of poverty and unemployment. The recent improvement of the security conditions could boost some recovery in private sector activity throughout 2008. Rising food and fuel prices increased inflation pressures during 2007. Annual inflation rose to 8.6 percent
in 2007, more than double the average inflation rate in 2006, boosted by higher food and fuel
prices. Although the banking system is sound, comprising only of branches of large foreign
banks the low loan quality continues to hamper the provision of new credit. The 2008 budget maintains the generally sound policy framework. Total expenditure is broadly unchanged and in line with the sustainable use of petroleum revenue. The new government has placed greater emphasis on meeting short-term needs with public transfers directed at, among others, refugees, veterans, and the elderly. However, weak administrative capacity continues to lead to poor budget execution. The offshore hydrocarbon sector has not been affected by the recent unrest and, therefore, Large oil/gas revenues continue to accrue. A robust and highly transparent framework for managing petroleum revenues is in place, including a petroleum fund. The Greater Sunrise oil/gas field (long-term revenue potential of about $10 billion) could commence production by 2014, although serious questions still remain about the project’s financial viability, and the feasibility of the government’s proposals for a refinery in Timor-Leste.
Fonte: FMI, mês de Abril de 2008
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