Friday, 8 of January 2021
H.E. Minister of Finance, Dr. Rui Augusto Gomes accompanied by H.E. Vice-Minister of Finance, Dra. Sara Lobo Brites, led the virtual-introductory conference with Head of IMF Article IV Mission and Team.
The video conference was an introductory session between Minister Gomes and Head of IMF Article IV Mission, Mr. Pablo Lopez-Murphy-, to discuss the Article IV Mission staff visit to Timor-Leste which will tentatively take place in August 2021. The meeting also discussed Timor-Leste’s Fiscal Policy Priorities for 2021 and some key structural challenges in short and medium terms.
Minister Gomes said “the political and economic uncertainty, inundation and COVID-19 pandemic have adversely affected Timor-Leste’s economic activities over the past three years. These challenges have caused significant contractions which limited the government’s abilities to implement its planned program and activities.” He also stated that, despite these challenges, the country has valuable resources, youthful and growing population. This is a momentum to recover the economy through good fiscal strategy that focused on the results based, transparency, rigor and discipline in the budget execution to ensure long-term fiscal sustainability and safeguard the assets of the Petroleum Fund.
Mr. Pablo Lopez-Murphy commented that, the Team is committed to work with Ministry of Finance to tackle any fiscal challenges and will support the Ministry by providing technical assistance through IMF Capacity Development Centre.
This virtual conference was also participated by Chief of Staff to the Minister of Finance, team from National Directorate of Economic Policy and the relevant management of the Ministry of Finance. Ms. Purva Khera and Mr. Masakazu Kamamura were from Article IV Mission Team.
Timor-Leste’s key fiscal policy priorities for 2021 focuses on improving the quality and access to education and national healthcare system, revitalize the economy through facilitate private sector investment, incentivize investment especially small and medium enterprise that help encourage business formation, job creation and employment opportunities for all Timorese.
In January 2019, an IMF team visited Timor-Leste from January 14-25 to conduct the 2019 Article IV Consultation discussions. The discussions covered current developments and economic policies, as well as the medium-term economic outlook. An Article IV mission was unable to take place in 2020 due to the Covid-19 pandemic. The following are the conclusions of the IMF Staff Consultation Mission under Article IV, 25 January 2019:
• A fiscal strategy is needed to ensure long-run fiscal sustainability and protect the assets in the Petroleum Fund. Continued investment in infrastructure, education, and health should be prioritized.
• Accelerating structural reforms is vital to foster economic diversification and job creation.