Timor-Leste Poverty Falls to 37%, but Rural Hardship and Inequality Persist

More than 500,000 people still live below the national poverty line

Timor-Leste's national poverty rate fell to 37% in 2024, down from a methodologically comparable estimate of 48.4% in 2014, according to a new summary report released by the Ministry of Finance through the National Institute of Statistics of Timor-Leste (INETL). Yet more than 500,000 people still lived below the national poverty line of $2.31 per person per day, and economic inequality increased.

The findings come from the 2024 Timor-Leste Survey of Living Standards, which covered 7,424 households between April and October 2024. Designed to represent conditions nationally and in individual municipalities, it provides the country's first comprehensive survey of living standards in a decade.

INETL President Elias dos Santos Ferreira presented the findings at the Ministry of Finance on October 20, 2026. He described progress in reducing poverty and expanding basic services. The strongest improvements included electricity and safe drinking water, while housing, sanitation, education and cooking fuels continued to show substantial deprivation.

Rural communities account for 86% of people below the poverty line. At the same time, the Gini coefficient, a measure of inequality, rose from a comparable 0.31 in 2014 to 0.36 in 2024. On this scale, zero represents complete equality and one represents complete inequality.

The combined picture is one of wider access to essential services and fewer people below the national threshold, alongside persistent differences in living conditions. The new household evidence also arrives after a public dispute over World Bank poverty projections, which use international thresholds and an older survey baseline.

Why the comparable decline is 11.4 percentage points

INETL calculates the decline over the decade as 11.4 percentage points, from 48.4% to 37%, after adjusting the older survey figures to make them comparable with the new results. Relative to that adjusted starting rate, poverty fell by about 24%.

The previously published national poverty rate for 2014 was 41.8%. Subtracting the new 37% figure from that older headline estimate gives a decline of 4.8 percentage points. The two calculations use different versions of the 2014 baseline.

The 2024 survey introduced a redesigned questionnaire, additional modules and interviews assisted by computers. Changes in how households are asked about their consumption can affect the resulting measurements. INETL therefore used a statistical procedure called survey to survey imputation to estimate a comparable 2014 figure.

In simple terms, the procedure creates a bridge between surveys conducted differently. The adjusted 48.4% baseline is the figure used to measure change under the comparable approach; 41.8% remains the earlier published estimate.

The national poverty line reflects local prices and household consumption patterns for basic food and other needs. Consumption measures the goods and services people use, including food, housing and other essentials. A forthcoming methodological note is expected to explain the statistical work in greater detail.

Rural poverty dominates, but municipal needs vary

The government presentation puts rural poverty at 45.5%, compared with 18.4% in urban areas; detailed descriptions of the summary report give the rural figure as 44.5%. Either rural figure is more than twice the urban rate.

Rural areas contain 86% of people living below the poverty line, while urban areas contain 14%, despite accounting for about 30% of the population. This concentration makes rural infrastructure, services and economic opportunities central to further poverty reduction.

Dili has the lowest municipal poverty rate, at 17.1%, while Atauro has the highest, at 74.4%. Poverty declined in every municipality except Aileu and Liquica, although the size of the improvement varied.

Population size changes the practical meaning of those rates. Dili still has roughly 59,000 residents in poverty, the third largest municipal total. Atauro has the fewest poor residents because its population is small, even though almost three quarters live below the threshold.

Municipal planning therefore needs both percentages and population counts. Atauro faces poverty affecting a large majority of residents, while Dili must serve a substantial number of poor people within a much larger population.

How far below the poverty line are families living?

The national Poverty Gap Index stood at 10.2% in 2024. This measure looks beyond the number of people in poverty to capture how far consumption falls below the threshold.

The index averages those shortfalls across the whole population, assigning a zero shortfall to people above the poverty line. Applied to the $2.31 daily threshold, 10.2% amounts to roughly $0.24 per person per day across the population. The summary gives an approximate shortfall of $0.23.

The squared poverty gap index was 4.0%. This measure gives greater weight to people whose consumption falls furthest below the line, helping show the severity of deprivation.

Rural areas recorded a poverty gap of 12.65% and a squared gap of 5.01%, roughly three times the corresponding urban measures. Rural hardship is therefore deeper as well as more widespread.

INETL's poverty indicator catalogue lists poverty rates, population counts, poverty gaps and severity measures for earlier survey years, including 2007 and 2014. Together, these measures help distinguish the number of people needing support from the depth of their needs.

Electricity and water access improved sharply

The share of the population without electricity fell from 27.9% in 2014 to 1.7% in 2024, a reduction of 26.2 percentage points. The share of households served by the state electricity utility EDTL rose from 67.2% to 93.6%.

Safe drinking water also reached more people. The share lacking access fell from 25.4% to 9.1%. The share without improved sanitation declined from 39.6% to 24.4%, leaving roughly one quarter still facing that deprivation.

Households living in adequate housing increased from 22.4% to 42.6%. Although that share almost doubled, adequate housing still reached fewer than half of households.

Cooking conditions improved more slowly. Reliance on inadequate cooking fuels fell from 86.8% to 70.9%, leaving about seven in ten households dependent on them. Among poor households, 86.7% used polluting cooking fuels, compared with 61.7% among households above the poverty line.

The figures show why electricity connections and clean cooking need separate attention. Electricity access expanded widely, while the fuels families used to prepare meals remained a major source of deprivation.

Housing, education and health reveal persistent gaps

Only 26.8% of poor people lived in adequate housing, compared with 51.9% of people above the poverty line. Among poor households, 52.1% had dirt floors, 41.2% had unimproved walls and 7.6% were overcrowded. The corresponding figures among other households were 29.4%, 20.0% and 2.1%.

Poor households also faced gaps in essential services: 32.7% lacked improved sanitation and 11.8% lacked safe drinking water. These conditions help explain why better housing and basic services remain priorities alongside raising consumption.

The reported illiteracy indicator for household members aged 10 or older fell from 63.4% to 47.1%. The share of families with a child of primary school age outside school declined from 16.7% to 11.7%.

Educational deprivation remained more common among poor people. Some 17.7% lived in households with a child of primary school age who was not attending school, compared with 8.2% among people above the poverty line, a difference of more than two to one.

Some 63.3% of poor people lived in a household containing someone aged 10 or older who could neither read nor write, compared with 37.6% among other people. These household measures capture how widely educational difficulties are spread across families.

Access to medical care showed little movement on one measure. About 8% of households in both survey years reported that a member had forgone needed care because of distance or cost. Despite gains elsewhere, those barriers persisted.

What the World Bank's 71.7% estimate measures

The World Bank's April 2026 Macro Poverty Outlook estimated that 71.7% of Timor-Leste's population would fall below an international poverty line of $4.20 per person per day in 2026. At its lower international threshold of $3.00, the estimate was 44.3%.

The Bank's technical note explains that these estimates were projected from the 2014 living standards survey using assumptions about how economic growth affects household welfare. The new national 37% figure comes from household information collected in 2024.

The international thresholds are expressed in 2021 purchasing power parity, or PPP. This converts amounts into a common unit that accounts for differences in prices between countries. The note expresses Timor-Leste's national poverty line as $2.93 in those units, close to the international $3.00 threshold.

The Bank uses international lines of $3.00 for countries with low incomes, $4.20 for countries with lower middle incomes and $8.30 for countries with upper middle incomes. Timor-Leste falls in the second group, with gross national income per person of $1,510 in 2025 under the Atlas method. The Bank also considers the $3.00 line relevant because of the country's income level and national threshold.

The same explanation is published in the Bank's Tetum technical note. The national line guides domestic policy, while international lines allow comparisons between countries. A higher threshold places more people below it.

The April outlook projected poverty declining between 2023 and 2028 from 48.3% to 42.1% at the $3.00 line, and from 74.5% to 70.1% at the $4.20 line. Updated international estimates will incorporate the 2024 survey.

How the survey and public debate unfolded

The survey, the World Bank projections and the national report appeared at different times. The sequence explains why public discussion involved both newly measured household conditions and estimates built from older data.

• April to October 2024: INETL collected information from 7,424 households for the living standards survey.
• April 2026: The World Bank published its Macro Poverty Outlook, including the projected 71.7% rate at the $4.20 international line.
• September 15, 2026: Vice Minister of Finance Regina de Jesus de Sousa challenged that figure in public comments and said the ministry would coordinate with the Bank on public information. The Council of Ministers supported publication of the national summary report.
• September 22, 2026: Fundasaun Mahein published an institutional analysis connecting the poverty debate with employment, public finances and governance.
• October 20, 2026: The Ministry of Finance and INETL launched the summary poverty report presenting the national rate of 37%.

Fundasaun Mahein's poverty and governance analysis argues that better statistics should be accompanied by productive employment and transparent institutions. It highlights the suspension of most civil service recruitment, growing interest in overseas employment and disputes surrounding evictions and resettlement as pressures affecting economic security.

The organisation also argues that expectations of Greater Sunrise production in the early 2030s leave an immediate need to address jobs and productivity. Those concerns connect the poverty figures to the opportunities households need to improve their circumstances.

What happens next with the new evidence?

Regina de Jesus welcomed the reduction in poverty while stressing that many families still struggle to meet basic needs and gain access to economic opportunities. She called for effective programmes, wider basic services and fairer opportunities, particularly for rural communities.

World Bank representative David Freedman also welcomed improvements since 2014 and reaffirmed the institution's commitment to working with the government and partners. INETL, the Ministry of Finance and the Bank will use the survey for a broader Poverty and Equity Assessment examining the causes of poverty and inequality.

The World Bank, explaining its role in producing international poverty estimates, states in its technical note:

Updated poverty estimates will replace the current projections in future editions of the MPO once the official statistics from the 2024 TLSLS have been published.

No specific publication date was given for those updated estimates, the methodological note, the broader assessment or the survey microdata. The microdata, meaning detailed survey records, are to be made available for research and policy development with protections for respondents' confidentiality and privacy.

The central policy task is concrete: extend the gains in electricity and water to housing, sanitation, clean cooking, education and health, while reaching rural households and other people still living below the poverty line. The planned assessment will examine what drove past progress and where further action should be directed.

Key Points

• National poverty fell to 37% in 2024, an 11.4 percentage point decline from the comparable 2014 estimate.
• More than 500,000 people remained below the national poverty line of $2.31 per person per day.
• Rural areas contained 86% of people in poverty; municipal rates ranged from 17.1% in Dili to 74.4% in Atauro.
• Inequality increased, with the Gini coefficient rising from 0.31 to 0.36.
• Electricity and water access improved, while housing, cooking fuels, education and access to medical care showed continuing needs.
• The World Bank's 71.7% figure used an international threshold and projections from 2014 data. Updated international estimates will use the new survey.