The non-oil economy in Timor –Leste (East Timor) is expected to continue to grow in 2014 and 2015 driven by public spending and by growth of the private sector, according to the 2014 Asian Development Outlook report by the Asian Development Bank.
According to the report, which was published Tuesday, Timore-Leste’s economy is expected to post growth of almost 8.5 percent in the two years analysed, which is marginally higher than the 8.0 percent growth posted in 2013.
“The biggest challenge the country faces is to convert oil wealth into jobs and services that lead to sustainable growth,” said Shane Rosenthal, the ADB’s national director for Timor-Leste, adding that it was “a challenge that will require long term investment in education and construction of infrastructure such as roads and water and electricity supply networks.”
In the document the ADB said that in the recent past Timor-Leste had posted moderate inflation as well as a reduction in public spending, which each year represents more than 80 percent of non-oil GDP, with most expenditure funded by oil royalties.
The Bayu-Udan oil field accounts for 95 percent of Timor-Leste’s oil and gas royalties, but production forecasts now suggest it reached a peak in 2012 and that reserves may run out by 2021, four years ahead of schedule. (macauhub)