The economy of Timor-Leste (East Timor) is expected to have grown at a rate of 8 percent in 2014, after cooling recorded in 2013, when the country grew by less than 1 percent, according to the report for 2014 from the country’s Central Bank published Wednesday in Dili.

Governor Abraão de Vasconcelos said in the report’s introduction that economic growth rates for 2015 and 2016 should be close to the average of recent years, of between 7 percent and 8 percent, “forecasts that remain of course dependent on a number of possibilities, including a continuous increase in budgetary spending and growth of domestic investment levels.”

The governor pointed out that forecasts from the Timor-Leste Central Bank were based on a set of leading indicators for the national economy, following a model developed in-house, since National Accounts for 2013 and 2014 have yet to be published.

Vasconcelos recalled that the robust growth experienced by the Timorese economy since 2008 was due “overwhelmingly” to the growth of the sectors of public administration, services and construction.

“Agriculture and fisheries, as well as the manufacturing, which are fundamental to job creation, have recorded low growth rates, at best, which resulted in significant loss in the weight of the sector in total GDP,” he said.

He added that this development is further proof that the Timorese economy remains overly dependent on the implementation of policies and budget programmes, which it is important to combat by promoting the diversification of the economic base and an increase in domestic production.

Among other macroeconomic figures the Governor of the central bank highlighted the favourable decline in inflation in 2014, compared to the previous three years – an average of 0.5 percent after an average of 11 percent between 2011 and 2013, which was due in large part to the impact of regional inflation which, in turn, was affected by the depreciation of Asian currencies against the dollar. (macauhub/TL)