IMF Executive Board Concludes the Second Review under the Extended Credit Facility Arrangement with São Tomé and PríncipePress Release No. 13/516
December 16, 2013
The Executive Board of the International Monetary Fund (IMF) today completed the second review under the three-year arrangement under the Extended Credit Facility (ECF) for São Tomé and Príncipe. The completion of the review enables the disbursement of an amount equivalent to SDR 0.37 million (about US$ 0.57 million), bringing the total disbursements under the arrangement to SDR 1.11 million (about US$ 1.71 million).
The Executive Board also concluded the 2013 Article IV Consultation with São Tomé and Príncipe. A press release will be issued in due course.
The three-year SDR 2.59 million (then about US$ 3.9 million) ECF arrangement with São Tomé and Príncipe was approved by the IMF’s Executive Board on July 20, 2012 (see Press Release No.12/272).
Following the Executive Board’s discussion, Mr. Min Zhu, Deputy Managing Director and Acting Chair issued the following statement:
“The authorities are to be commended for a satisfactory performance under the Fund-supported program. Steady economic growth and disinflation have been maintained in a challenging global environment, and a prudent fiscal stance has underpinned the fixed exchange rate regime.
“Looking ahead, it is important to continue to strengthen economic resilience, particularly in light of uncertain prospects for oil production. Fiscal discipline, particularly in the run-up to the 2014 elections, will be crucial. In this regard, improvements in revenue mobilization continue to be necessary to create additional space for public investments and social spending. Reliance on grant and concessional financing will help mitigate the risk of debt distress.
“Policy priorities for the financial sector are to reinforce compliance with prudential requirements and to promote the efficiency and profitability of the banking system.
“Continued efforts to improve productivity and competitiveness are necessary to reduce external vulnerabilities. Upgrades in infrastructure and further regulatory reforms will help improve the business climate and promote economic diversification.”