IMF Sees São Tomé and Príncipe’s Economy Regaining Momentum Over the Mid-Term
The IMF expects economic growth in São Tomé and Príncipe to gradually recover to about 2. 75% over the medium term. Agriculture, tourism, diaspora remittances, and public investment are expected to support the rebound. Power sector reforms remain critical as electricity shortages continue to weigh on growth. São Tomé and Príncipe’s. . .
The IMF expects economic growth in São Tomé and Príncipe to gradually recover to about 2. 75% over the medium term. Agriculture, tourism, diaspora remittances, and public investment are expected to support the rebound. Power sector reforms remain critical as electricity shortages continue to weigh on growth. São Tomé and Príncipe’s economy is expected to gradually regain momentum after two years of weak growth, according to astatementreleased by the International Monetary Fund (IMF) on June 22 following a mission to the country. The IMF forecasts a gradual recovery in economic activity, with growth expected to reach about 2. 75% over the medium term. The rebound is expected to be supported by the resilience of the agricultural sector, a recovery in tourism, remittances from the diaspora, and public investment. However, the Fund noted that demographic trends are likely to limit the country’s long-term growth potential. According to the IMF, continued reforms in the energy sector will be essential to sustaining the recovery. Improving electricity supply would help ease constraints on economic activity while reducing pressure on public finances and foreign exchange reserves. Short-term prospects remain challenging, however. The IMF lowered its growth forecast for 2025 to 1% and expects growth to slow further to 0. 4% in 2026. The weaker outlook reflects prolonged power outages, delays in the energy transition, and higher global oil prices linked to the conflict in the Middle East. The assessment was made as part of the third review of the country’s 52-month program supported by the IMF’s Extended Credit Facility. IMF staff and São Toméan authorities also reached a staff-level agreement, paving the way for a $6. 1 million disbursement, subject to approval by the Fund’s Executive Board. Ingrid Haffiny