In its latest Timor-Leste Economic Update, the bank said growth should continue by around 4% in 2027,  although the gains are unlikely to translate into strong job creation.

In its report Leveling Up: How ASEAN Membership Can Support Timor-Leste’s Economic Transformation, the bank said growth is expected to be driven mainly by public investment in infrastructure, construction activity, and household consumption, alongside steady activity in services such as trade, transport and public administration.

The World Bank said that despite this growth outlook, “employment generation remains weak, with most jobs still concentrated in agriculture and informal work, while opportunities in the formal private sector remain“small.”

It warned that economic expansion “has limited impact on job creation,” particularly for young people entering the labour market.

Exports also remain limited, with the country heavily reliant on imports, contributing to a persistent trade imbalance.

The report said ASEAN membership could help accelerate economic transformation by improving access to regional markets and attracting investment, particularly in agribusiness, fisheries, tourism, and light manufacturing.

It said these sectors offer the strongest potential for diversification, but require improvements in infrastructure, skills, and the business environment to develop at scale.

“ASEAN integration presents a critical opportunity to shift toward more productive and private sector-led growth,” the report said, adding that without deeper reforms, growth will continue to rely heavily on government spending rather than exports or industry.

The World Bank said Timor-Leste’s challenge is not only to sustain growth, but to ensure it creates more and better jobs as the country integrates further into Southeast Asia.