This statement contains information that has become available since the staff report was circulated to the Executive Board. This information does not alter the thrust of the staff appraisal.
1. Following the revision of the discount rate approved by the IMF and World Bank Boards on October 11, 2013, staff has recalculated the debt sustainability assessment for Timor-Leste using the new five percent discount rate. This results in a slightly more favorable outlook for the calculated net present value of debt in relation to GDP and exports. The overall assessment of risk of debt distress and debt vulnerabilities discussed in the staff report and DSA remains unchanged.
2. The budget for 2014 remains under preparation but discussions with the authorities indicate that actual expenditures are planned to be stable in line with the framework agreed with Fund staff in June 2013. This is important not only for fiscal sustainability but for lowering inflation that remains above 10 percent, despite the recent appreciation of the U.S. dollar against regional currencies.