[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110351-en":3,"doc-seo-110351-105":29,"detail-sidebar-cat-0-en-105":82},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},110351,549758252649,"Ivy","https://ap-avatar.wpscdn.com/avatar/8000253669c5317157?_k=1778319167496531819",8,"Research & Report","Democratic Republic of Timor Leste - Joint Bank-Fund Debt Sustainability Analysis - Moderate Risk Assessment","The joint Bank-Fund debt sustainability analysis assesses Timor-Leste’s risk of external and overall debt distress, concluding a moderate risk while applying judgment. Although baseline projections breach external debt-to-exports and debt service-to-exports indicative thresholds in the medium term, the Petroleum Fund’s size, liquidity, and accessibility mitigate near-term stress. Long-term risks rise due to higher fiscal deficits and faster depletion, with Petroleum Fund assets projected to be exhausted in 2038, necessitating policy adjustments via an alternative scenario.","Public Disclosure Authorized  \nApproved by:  \nHassan Zaman and Marcello Estevão (IDA); and Ranil Salgado and Eugenio Cerutti (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \nPub lic Disc losure Authorized  \n\n| DEMOCRATIC REPUBLIC OF TIMOR LESTE: JOINT BANK-FUND DEBT SUSTAINABILITY\u003Cbr>ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | Moderate |\n| Overall risk of debt distress | Moderate |\n| Granularity in the risk rating | Limited space to absorb shocks |\n| Application of judgment | Yes. Petroleum sovereign wealth fund is a strong mitigating factor for the country’s debt sustainability in the next 10 years. |\n\nTimor-Leste remains at moderate risk of overall and external debt distress, with application of judgement, unchanged from the 2021 Article IV debt sustainability analysis. The present value of external debt-to-exports ratio and the debt service-to-exports ratio under the baseline are projected to breach their respective indicative thresholds in the medium-term, triggering a high-risk mechanical rating for external and overall debt. In the medium-term, however, the Petroleum Fund is large relative to projected debt levels and debt service requirements, and its assets are liquid and accessible, thus acting as a mitigating factor, prompting the use of judgement to upgrade the risk assessment. Longterm risks to debt sustainability have increased compared to the 2021 Article IV debt sustainability analysis, reflecting higher projected fiscal deficits and a faster depletion of the Petroleum Fund. Staff projects that the Petroleum Fund, which is the main source of funding of fiscal deficits, will be depleted in 2038, triggering a breach of all debt indicators towards the end of the twenty-year projection horizon. However, there is time to adopt necessary policy adjustments—staff’s alternative scenario illustrates how fiscal consolidation and structural reforms can ensure both fiscal and debt sustainability in the long term.  \n1. The coverage of public sector debt used in this report is public and publicly guaranteed debt. Timor-Leste’s public and publicly guaranteed external debt is held entirely by the central government. The coverage of public sector debt includes state-owned enterprise debt. Under the Public Debt Regime Law, state-owned enterprises are not allowed to borrow for themselves and can only obtain financing via on-lending from the Ministry of Finance.1 The public sector only borrows externally, given a lack of domestic financing sources. The debt definition of the debt sustainability analysis is currency-based, and the legal tender is the U. S. dollar.  \n\n|  |\n| --- |\n|  |\n\n2. Timor-Leste’s net public asset position is currently strong due to oil-related savings accumulated in Petroleum Fund assets and low levels of public debt.  \n• The Petroleum Fund balance at end-2021 stood at $18.9 billion (1,127 percent of nonoil GDP), covering 240 months of prospective goods and services imports. The Petroleum Fund balance increased by $0.7 billion in 2021 as investment income ($1 .1 billion) and oil revenues ($0 .7 billion) more than compensated for transfers to the budget ($1 .2 billion) .2 The average nominal return on Petroleum Fund assets during 2017–21 was 7.4 percent.  \n1According to the Public Debt Regime Law No. 13/2011, the Government of Timor-Leste, in particular the Ministry of Finance, is the only entity that may engage in borrowing, motivated by financing needs generated by the need to execute the State’s priority tasks relating to the building of strategic infrastructure for the country’s development.  \n2 The Petroleum Fund constitutes the main financing source for the budget. The amount is guided by the estimated sustainable income, which is set at 3 percent of total petroleum wealth (sum of the Petroleum Fund balance and the net present value of expected future petroleum revenue) . Withdrawals in excess of the estimated","cbCaibrVBxrZWHUf","https://ap.wps.com/l/cbCaibrVBxrZWHUf","pdf",1160147,1,24,"English","en",105,"# Risk Ratings and Judgment Approach\n## External and Overall Debt Distress\n## Mitigating Role of the Petroleum Fund\n# Long-Term Debt Sustainability Outlook\n## Fiscal Deficit Trends and Fund Depletion\n## Policy Adjustment Scenarios\n# Debt Coverage and Macroeconomic Basis\n## Public Sector Debt Definition\n## Legal Tender and Public Debt Regime","[{\"question\":\"When is the Petroleum Fund projected to be depleted, and what does that imply?\",\"answer\":\"Staff projects the Petroleum Fund will be depleted in 2038. This triggers breaches of all debt indicators toward the end of the twenty-year projection horizon.\"}]",1784485023,60,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":77,"head_meta":79,"extra_data":81,"updated_unix":27},"democratic-republic-of-timor-leste-joint-bank-fund-debt-sustainability-analysis-moderate-risk-assessment","",{"@graph":35,"@context":76},[36,53,67],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/democratic-republic-of-timor-leste-joint-bank-fund-debt-sustainability-analysis-moderate-risk-assessment/110351/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":61,"encodingFormat":60,"isAccessibleForFree":62,"interactionStatistic":63},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-19",true,{"@type":64,"interactionType":65,"userInteractionCount":4},"InteractionCounter",{"@type":66},"ViewAction",{"@type":68,"mainEntity":69},"FAQPage",[70],{"name":71,"@type":72,"acceptedAnswer":73},"When is the Petroleum Fund projected to be depleted, and what does that imply?","Question",{"text":74,"@type":75},"Staff projects the Petroleum Fund will be depleted in 2038. 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