The on-oil economy of Timor-Leste (East Timor) contracted by 1.8% in 2017, mainly the country's economy, according to a World Bank report.
The report, published on Tuesday, shows the impact Timor's political crisis is having on the Timorese economy, with government spending slipping 24% in 2017 compared with 2016. The non-oil economy, which saw growth of 5% in 2016, contracted by 1.8% in 2017.
The report projects that the economy will return to growth in 2018, with non-oil GDP increasing by 2.8% with a forecast of a return of private investment in the short term.
The drop in oil production and coffee exports in 2017, due to worse weather conditions, also affected the Timorese economy. If the oil sector is taken into account, real GDP contracted 10% in 2017, following growth of 1% in 2016.
Gross national income, which fell from US$4.5 billion in 2011 to US$2.3 billion in 2016, recovered slightly to US$2.9 billion in 2017. In 2017 the State contracted loans of US$21.9 million – down from US$30.6 million in 2016, according to the World Bank.
Although private consumption was more robust in 2017, both public and private investment fell, and direct foreign investment "dried up," the World Bank report said. (macauhub)