The International Monetary Fund (IMF) has reached a staff-level agreement with São Tomé and Príncipe on the first review under the Extended Credit Facility (ECF) arrangement. The IMF team, led by Mission Chief Slavi Slavov, visited São Tomé from May 8 to May 21, 2025, to assess progress on reforms and policy priorities.
Mr. Slavov stated that the agreement would allow São Tomé and Príncipe access to about SDR 4 million (US$5.3 million), pending approval by the IMF’s Executive Board. This will bring total disbursements under the current arrangement to approximately SDR 8 million (about US$10.6 million).
Despite global economic challenges, São Tomé's economy showed resilience with a growth rate of 1.1 percent in 2024, amid high inflation and vulnerability to climate change. Inflation remains in double digits but core inflation has decreased significantly. The pegged exchange rate supports domestic stability; however, it exerts pressure due to inflation differentials with the Euro Area.
Growth projections for São Tomé are positive: an expected increase of 2.9 percent in 2025 and further acceleration to 4.7 percent in 2026, stabilizing around 3.5 percent over the medium term. This is attributed to recovery in agriculture and tourism sectors alongside private and public investments.
The IMF program aims to mobilize financial support from development partners while declining international oil prices are anticipated to ease fiscal pressures, enhancing reserves accumulation and macroeconomic stability.
Key discussions during the visit included investment in resilient infrastructure and improved public investment management as measures against climate change vulnerabilities. The talks also addressed better inflation forecasting, liquidity management, and enhanced financial inclusion.
Meetings were held with President Carlos Vila Nova; Prime Minister Américo d'Oliveira dos Ramos; Minister of State for Economy and Finance Gareth Haddad do Espírito Santo Guadalupe; Acting Governor of the Central Bank Lara Simone Beirão; government officials; private sector representatives including banks; and development partners.
The IMF mission expressed gratitude for the cooperation received from local authorities during their visit.