The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
The recent rise in inflation in Timor-Leste has raised concerns about international competitiveness and the cost of living. After remaining relatively subdued for several years, inflation in Timor-Leste rose decisively over the past two years. Higher food prices account for most of the increase in the consumer price index (CPI) in 2006-07. In contrast, the pace of non-food CPI inflation decelerated slightly in 2007, to below 3.5 percent on average. Further, based on Q1 2008 data, the second-round impact of oil price increases on inflation is emerging.