Government and the National Parliament begin discussions on the proposed amendment to the 2026 GSB, which includes measures to mitigate the impact of the international crisis

Prime Minister Kay Rala Xanana Gusmão presented, today, May 28^th, 2026, in the National Parliament, a law proposal for the first amendment to the 2026 General State Budget (GSB 2026), thereby initiating the general debate and the process of discussion and voting on the supplementary budget. 

During the presentation of the proposal, the Head of Government stated that “the budget debate is not merely about numbers, percentages, and financial data,” emphasising that “the ultimate goal is to promote the country’s development and the well-being of its citizens.”

The Prime Minister cited the current international situation—marked by geopolitical instability and its impact on global energy markets—as the reason for the budget amendment. “The world is currently facing a period of unpredictability and insecurity, with dire consequences that are felt most acutely in developing countries, such as Timor-Leste,” he said.

Kay Rala Xanana Gusmão warned that “Timor-Leste, which remains heavily dependent on imports, is particularly vulnerable to these shocks, which could even lead to social instability,” and added that “it is our duty—that of the Government and the National Parliament—to ensure national security and protect the Timorese.”

The main measure proposed in the Supplementary Budget is the creation of a national strategic fuel reserve valued at US$174.3 million. According to the Prime Minister, “this is a strategic decision to ensure the continuity of fuel supplies in Hera, Betano, RAEOA, and Ataúro, as well as to safeguard the operation of essential services during a period of global uncertainty.”

The Head of Government explained that the reserve will cover approximately seven months of the country’s electricity generation fuel needs. “The main measure is the creation of a national strategic fuel reserve worth US$174.3 million, sufficient to cover approximately seven months of electricity generation needs,” he stated.

The proposal also includes a US$42 million fuel subsidy programme to mitigate the impact of rising international fuel prices on households and businesses. “We are also introducing a US$42 million fuel subsidy programme to limit the direct impact of rising international fuel prices on households and businesses,” he said.

During his speech, the Prime Minister noted that the budget amendment was prepared by reallocating funds from projects deemed less of a priority to address the most urgent needs. “The reallocation of resources from lower-priority projects to priority and urgent areas does not represent a step backward, but rather an honest effort to redefine priorities,” he said.

The Prime Minister also emphasised that the proposal aims to address the current situation without immediately increasing the strain on the Petroleum Fund. “We are responding to an urgent crisis, but without placing any immediate additional strain on the Petroleum Fund,” he said.

In his address to Members of Parliament, Kay Rala Xanana Gusmão reaffirmed the Executive’s ongoing commitment to its priorities. “Our goals to invest in national transformation, regional integration, and inclusive development remain firm,” he said.

“The Government will continue to invest in roads and bridges, improve schools and health services, support agriculture and tourism, support the private sector, and create opportunities for young people,” he added.

The Prime Minister also highlighted Timor-Leste’s commitment to regional integration and to participation in international organisations. “The Government will also continue to work to ensure that Timor-Leste fulfils its responsibilities as a member of ASEAN,” he said.

Regarding Timor-Leste’s international standing, he stated that “integration into ASEAN, accession to the WTO, cooperation with the CPLP, and partnerships with our neighbours and development partners are not merely symbolic. They are pathways to our country’s development and to bilateral and regional stability and cooperation.”

Kay Rala Xanana Gusmão also noted that, despite the current international situation, “our economy remains resilient,” and added that “Timor-Leste is moving forward. Our people are working, our companies are investing, our public programmes are supporting economic activity, and our reforms are beginning to strengthen the economy’s foundations.”

The Prime Minister acknowledged, however, that the country remains vulnerable to external factors. “Despite the positive progress, we remain vulnerable to external shocks,” he said, adding, “We cannot, however, give up. Within our means, we have a duty to take all necessary measures to safeguard our country and protect the well-being of our people.”

At the conclusion of his remarks, the Head of Government appealed to the sense of responsibility of the sovereign bodies during the parliamentary debate on the law proposal. “The budget amendment law proposal is presented with seriousness and confidence. Confidence in the resilience of our people. Confidence in the dedication of our institutions. And confidence in the sense of responsibility of the sovereign bodies,” he stated.

“We are here today to discuss a well-considered, balanced, and pragmatic budget amendment—an amendment aimed at ensuring the country’s security and protecting our people,” he concluded.

Following the Prime Minister’s presentation of the law proposal, the National Parliament began the general debate on the amendment to the 2026 GSB. The detailed debate will run from May 29^th to June 2^nd, culminating in the final overall vote on the first amendment to Law No. 8/2025 of November 27^th.