World Bank2025-02-122025-02-122025-02-12https://hdl.handle.net/10986/42806Timor-Leste faces a defining moment in its economic journey. As the country seeks to transition from petroleum dependency to a more diverse and resilient economy, the stakes cannot be higher. The Petroleum Fund, a lifeline that has sustained much of the national budget, risks depletion by 2035, based on recent Ministry of Finance estimates, unless there are urgent reforms. Ambitious national goals - such as upcoming ASEAN membership - reflect the country’s aspirations to integrate globally and broaden its growth horizons. Yet, these opportunities are weighed down by significant fiscal challenges. More specifically, an expanding national budget that raises concerns about fiscal sustainability and the efficiency of public spending. The question is clear: how can Timor-Leste spend better to fuel sustainable growth while preserving fiscal stabilityen-USCC BY-NC 3.0 IGOECONOMIC GROWTHECONOMIC JOURNEYPETROLEUM DEPENDENCYFISCAL SUSTAINABILITYPUBLIC SPENDING EFFICIENCYSUSTAINABLE GROWTHReportWorld Bank10.1596/42806https://doi.org/10.1596/42806