National Parliament Approves 2026 State Budget Focused on National Transformation, Regional Integration and Inclusive Development

Today, November 21, 2025, the National Parliament approved, in a final overall vote, the General State Budget (OGE) for 2026, in the consolidated amount of US$2.291 billion, aimed at strengthening economic transformation, regional integration and inclusive development in Timor-Leste. The Bill was approved with 42 votes in favor, 0 against and 23 abstentions. 

The 2026 budget embodies the motto ‘Investing in National Transformation, Regional Integration and Inclusive Development,’ continuing the strategy defined in the 2011–2030 Strategic Development Plan and the Program of the 9^th Constitutional Government. The document channels resources into social capital, for the development of strategic infrastructure, economic diversification and institutional strengthening — essential pillars for consolidating economic growth and improving citizens' access to public services.

In his closing remarks, Prime Minister Kay Rala Xanana Gusmão emphasised the constructive nature of the parliamentary debate, stating that the Government “humbly” welcomes the “constructive criticism” of the members of the National Parliament, which enables the Executive to "serve better, work responsibly, efficiently and effectively, without unnecessary expenditure and without nepotism or factionalism.“ The Head of the Government also paid ”tribute to all those who 50 years ago showed the world the people's dream of independence," recognising their ”courage, determination, and commitment to this beloved nation in unilaterally proclaiming the independence of Timor-Leste."

In his speech at the opening of the 2026 State Budget discussion, the Head of Government stated that this budget "is more than a financial plan; it is our pact with the Timorese people and our commitment to the region we are joining, as equals”, highlighting that 2026 will be “the year of transforming the economy, boosting employment, productive investment and social inclusion.’

The 2026 budget provides for strategic investments in social capital, with a focus on strengthening health, education and social protection systems. Increased investment in essential infrastructure, including roads, electrification, drinking water, telecommunications and strategic equipment. Measures to boost the private sector, drive productive investment and generate decent jobs for young people.

Structural reforms, including the creation of the National Development Bank of Timor-Leste (BDNTL); modernization of public financial management and digitization of services; implementation of digital identification mechanisms; preparation for the introduction of VAT in 2027; strengthening of institutions responsible for full ASEAN membership.

Macroeconomic forecasts point to non-oil GDP growth of 4.5% in 2025 and 2026, driven by consumption, public investment and private sector dynamism

After formal submission to the National Parliament on  October 1^st , presentation of the draft law in plenary on  November 5^th and its approval in general terms on  November 7^th , the 2026 General State Budget proceeded to detailed discussion and voting, culminating today in the final overall vote. With the parliamentary process now complete, the final draft of the bill will be sent to the President of the Republic for promulgation, in accordance with the Constitution of the Democratic Republic of Timor-Leste.