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The EU and Australian Government recently showed their confidence in the KPI system for measuring performance by agreeing to provide direct budgetary support to the MoF. This
support uses the Government of Timor- Leste s pu li fi a ial a age e t system and
therefore conforms to new deal principles. Overall the KPIs are an important management tool. These indicators have linked the MoF
s vision to specific activities, strengthened budgeting and improved human resource
management. In conclusion, the MoF has implemented reforms to strengthen economic monitoring, public
financial management and performance management. These reforms should assist the development of more effective economic policies and contribute to more efficient public
spending.
2.3: Economic Overview
2.3.1: International Economy
2.3.1.1: Trends in International Growth
The global economic growth rate slowed from 3.2 to 3.0 from 2012 to 2013. Growth in the emerging market and developing economies slowed from 5.0 in 2012 to 4.7 in 2013,
while over the same period growth in the advanced economies slowed from 1.4 to 1.3. Despite less favourable financial conditions emerging market and developing economies
continue to drive global growth. The IMF forecast that the annual global growth rate will increase to 3.6 in 2014 and then
to 3.9 2015. The improved growth in the advanced economies in 2014 and 2015, at 2.2 and 2.3 respectively, is forecast to be driven by reduced fiscal tightening and favourable
monetary conditions. While the growth in the emerging market and developing economies over these years, at 4.9 and 5.3 respectively, is the result of the increased demand from
the advanced economies. However, risks to the outlook remain, in particular the increased geo-political risk and the possibility that lower than expected demand in the advanced
economies will impact on global growth.
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Figure 2.3.1.1.1: Real Economic Growth 2011 – 2015
Source: IMF, World Economic Outlook Database, April 2014
Emerging and developing Asia is one of the high growth areas in the world see figure 2.3.1.1.1 and Timor-Leste is performing particularly well within this group of economies.
The increased demand for goods and services associated with the strong growth outlook in Asian markets represents an important export opportunity for Timor-Leste.
Table 2.3.1.1.1: Real Regional Growth Rate
Country Actual
Projection
2012 2013
2014 2015
ASEAN-5 6.2
5.2 4.9
5.4 Australia
3.6 2.4
2.6 2.7
China 7.7
7.7 7.5
7.3 Indonesia
6.3 5.8
5.4 5.8
Malaysia 5.6
4.7 5.2
5.0 Philippines
6.8 7.2
6.5 6.5
Singapore 1.9
4.1 3.6
3.6 Thailand
6.5 2.9
2.5 3.8
Vietnam 5.2
5.4 5.6
5.7 Timor Leste
7.8 5.6
7.1 7.0
Sources: Timor-Lestes National Accounts 2000-2012, National Directorate of Economic Policy Timor-Leste and International Monetary Fund, World Economic Outlook Database, April 2014
Timor- Leste s GDP efe s to the o -petroleum sector only
Projection
2.3.1.2: Trends in International Prices
