In December 2025, East Timor experienced a slight decline in its annual inflation rate to 1.0%, a reduction from the one-year peak of 1.2% noted in November. The principal factors contributing to this easing were the reduced inflation rates for food and non-alcoholic beverages, which fell to 2.0% from 2.4% in November. Additionally, ongoing deflation was observed in several sectors: alcohol and tobacco saw a decrease of -2.9%, compared to -2.8% previously; transport at -0.1%, down from -0.5%; clothing and footwear decreased to -0.3% from -0.2%; and communication remained steady at -0.2%. The inflation rates for housing and recreation and culture held steady at 1.1% and 0.5%, respectively, while prices in the health sector showed no change, remaining flat at 0.0%.
Conversely, there was a slight uptick in inflation in the category of furnishings, household equipment, and routine maintenance, which rose to 1.3% from the previous 0.9%. On a month-to-month comparison, consumer prices decreased by 0.1% in December, which inversely followed a 0.1% rise in November. In parallel, the tradable Consumer Price Index (CPI) increased by 1.0% year-on-year, moderating from the prior 1.2%, whereas the non-tradable CPI rose by 1.1%, slightly under its previous rate of 1.2%.
