East Timor’s economy recovered from stagnation in 2013, when it grew by less than 1 percent, to expand by about 8 percent last year. Strong growth is expected to continue in 2015 and 2016, the Governor of the Central Bank of East Timor (BCTL), Abraão de Vasconselos, said in its annual report published this week.

The bank notes that there are not yet known estimates for the National Accounts covering 2013 and 2014. As a result the central bank’s estimates are based on a set of leading indicators available for the national economy, “using a model developed internally”.

“For 2015 and 2016, BCTL continues to project levels of economic growth close to the average recorded in recent years, between 7 percent and 8 percent on an annual basis,” said Mr Vasconselos.

He added: “These forecasts remain naturally dependent on the materialisation of a series of working assumptions, among which are an increase of budgetary spending and continued growth of domestic investment levels.”

The central bank notes that gross domestic product (GDP) expansion “was overwhelmingly explained” by the growth in the public administration, services and construction.

“Agriculture and fisheries, as well as manufacturing, basic industry; fundamental sectors for job creation; have recorded anaemic growth rates, at most, which resulted in significant loss of these sectors’ importance in total GDP,” said Mr Vasconselos.

“This development is another evidence that our economy remains overly dependent on the implementation of policies and public budget programmes, which must be countered by actively promoting the diversification of the economic base and the increase in domestic production,” he added.