## 1. Bank Assets (Q1-2025)

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---

### A. Introduction — macroeconomic context and purpose
- Macro imbalances and structural constraints:
  - heavy reliance on imports and foreign aid,
  - narrow production base and limited export capabilities,
  - recent slowdown in economic growth and a marked increase in inflation,
  - declining foreign inflows and a significant reduction in foreign exchange reserves.
- Authorities’ reform objectives:
  - improve fiscal balances,
  - enhance domestic production capabilities,
  - reduce reliance on imports,
  - create a more resilient framework to withstand external shocks.
- BCSTP actions and gaps:
  - tightened monetary policy and progressed in developing its liquidity management framework with IMF technical assistance,
  - additional actions required.
- Purpose of the paper:
  - provide an overview of the banking system (Section B),
  - assess the monetary policy and liquidity management framework (Section C),
  - describe banking-sector liquidity (Section D),
  - offer recommendations (Section E),
  - conclude (Section F).

### B. Overview of the banking sector — structure, challenges, and credit developments
- Structural features and constraints:
  - small banking sector with high operating costs, low asset quality, and low profitability;
  - limited investment opportunities in the domestic market;
  - significant portion of deposits held in foreign currencies.
- Market concentration:
  - the largest bank controls 65 percent of total assets.
- Private sector credit and rates:
  - private sector credit fell sharply since 2019;
  - private sector credit contracted for nearly five years and dropped to less than 8 percent of GDP, down from 24 percent pre-pandemic.
  - credit interest rates have trended down over ten years but remain close to 20 percent.
- Non-performing loans (NPLs) and regulatory response:
  - high NPLs discouraged lending and led banks to hold more liquid assets;
  - uncertainties in judicial enforcement of collateral further discouraged lending.
  - regulatory changes in 2022 on asset classifications, provisioning, and capital adequacy reduced systemwide NPLs to 10 percent of total loans by Q1:2025, down from approximately 34 percent in Q3:2020.

### C. The current monetary policy and liquidity management framework
- Instruments in use:
  - Open Market Operations (OMO) via BCSTP Certificates of Deposit (CDs).
  - Required Reserves (RR).
  - Standing facilities (deposit and lending facilities).
  - Treasury Bills (T-bills) may be used for monetary policy but are primarily issued for budget financing.
  - Refinancing operations in exceptional circumstances using the policy reference rate.
- Open Market Operations details:
  - OMO regulation in place since 2014; more actively used to absorb excess liquidity since 2020.
  - allowable operations include outright transactions, repo/reverse repo, and foreign exchange swaps.
  - eligible collateral is broad.
  - CDs maturities range from 1 to 360 days and can be used for short- and long-term sterilization.
  - until November 2021, CDs issued via fixed quantity and rate tenders (predominantly one-month); since July 2022, issuance shifted to fixed-quantity, variable-rate tenders.
- Required Reserves (RR) specifics:
  - cornerstone of the framework since 1992.
  - current RR rates:
    - unremunerated reserves set at 28 percent for local currency liabilities (an increase from 18 percent prior to mid-2022),
    - 21 percent for foreign currency liabilities.
  - RR composition: 90 percent in local currency and 10 percent in foreign currency.
  - calculation based on monthly average of deposits recorded in the second month prior to the month of compliance; maintenance period of one month.
- Standing facilities and policy rates:
  - deposit facility rate: 0 percent (unremunerated);
  - lending facility rate: 10.5 percent;
  - BCSTP key policy rate: 10 percent (not effectively used as a benchmark by banks).
  - both loan and deposit operations are limited to a maturity of five days.
  - due to excess liquidity and unremunerated deposit facility, banks typically do not use the deposit facility and rarely access the lending facility.
- Collateral requirements:
  - acceptable collateral: BCSTP securities, CDs, T-bills, and deposits in foreign currencies.
  - BCSTP CDs and securities valued at face value and must be free from encumbrances.
  - foreign exchange assets valued based on BCSTP exchange rate and at market value; must be free from charges.
  - total collateral required: at least 125 percent of the requested loan amount.
  - eligible instruments accepted only if their value exceeds the bank's reserve requirement at the BCSTP.
- New monetary policy framework features:
  - core inflation target: 3.1 percent (six-month moving average, the average before the pandemic).
  - BCSTP aims to keep banks’ excess reserves in local currency below a threshold by issuing CDs at variable rates until the six-month moving average of core inflation falls below the target.
  - current threshold: STN 275 million (previously STN 200 million).
  - BCSTP committed to introducing 12-month CDs to complement existing 1-month, 3-month, and 6-month options to absorb structural excess liquidity.
  - when excess reserves fall below STN 275 million, the MPC may offer limited amounts of CDs monthly to extract interest rate signals.
- Monetary Policy Committee (MPC):
  - established in 2013.
  - composition includes the Governor, Deputy Governor, administrators/directors responsible for liquidity management, markets, economic studies, statistics, supervision, and three senior advisors.
  - MPC sets the policy reference rate and lending facility rate, provides recommendations on financial stability, fiscal policy, and government debt management.
  - MPC convenes quarterly and issues a press release on decisions.
- Interbank Money Market (IMM):
  - regulation effective since 2015 allows banks to exchange funds for up to one year.
  - transactions can be bilateral, collateralized or non-collateralized; eligible collateral includes foreign currency deposits, T-bills, and BCSTP CDs.
  - transactions are required to be conducted in local currency unless collateral is foreclosed.
  - IMM is currently inactive due to insufficient trust among banks and underdeveloped registration and settlement infrastructure.
- Liquidity forecasting efforts:
  - BCSTP initiated liquidity forecasting in 2011 with a one-day model based on anticipated cash flows from autonomous factors and attempted to extend to one month.
  - progress impeded by resource limitations and difficulties obtaining accurate data.
  - Treasury Directorate at the Ministry of Economy and Finance (MEF) has sought to improve cash flow predictability, but government payment timing and withdrawals complicate forecasting.

### D. Liquidity dynamics: historical evolution, drivers, and key statistics
- Historical evolution and drivers:
  - Before 2017: persistent structural excess liquidity with excess reserves increasing to a peak of STN 783 million by early 2017. Government spending was the primary driver; banking system hampered by high levels of NPLs, lending risks, and judicial and administrative obstacles.
  - 2017–2019: excess reserves decreased steadily, reaching a low of STN 494 million by the end of 2019, mainly due to decreased external support.
  - 2020–mid-2022: significant increase in excess reserves during the pandemic crisis, largely driven by external support to mitigate COVID-19 effects.
  - Mid-2022 onward: excess liquidity significantly decreased due to fiscal consolidation measures and monetary policy tightening, including increased reserve requirements and BCSTP stopping credit to the government.
  - Late 2024–early 2025: excess reserves increased again, driven by foreign exchange inflows from external disbursements and a regulation requiring banks to sell 25 percent of their foreign exchange revenues to the BCSTP.
- Key statistics and market outcomes (preserved exactly):
  - Peak excess reserves: STN 783 million (early 2017).
  - Low in excess reserves: STN 494 million (end-2019).
  - BCSTP CD weighted average interest rates: 1.3 percent in July 2022 to 4.6 percent by December 2024.
  - T-bill interest rates: approximately 4 percent in mid-2022 to 6.2 percent in April 2024.
  - MEF two-year T-bonds: interest rates ranging from 4 to 6 percent.
  - Short-term deposit interest rates (banking system): 2.3 percent in mid-2022 to 2.6 percent by December 2024.
  - Six-month moving average of core inflation: approximately 12 percent (mid-2022 to end-2023) to 3.3 percent by December 2024.
  - Stock of CDs: rose to STN 335 million by mid-February 2025—50 percent higher than excess reserves in January 2025.
  - BCSTP target for excess reserves: STN 275 million.
  - Regulation: banks required to sell 25 percent of their foreign exchange revenues to the BCSTP.
  - Market concentration: one commercial bank holds around two-thirds of the total liquidity surplus.
- Challenges in liquidity absorption and market functioning:
  - Uneven distribution of excess liquidity limits effective absorption; not all surplus is available due to transactional and precautionary needs.
  - Lack of a functioning standing credit facility, weak interbank market, absence of acceptable collateral, and low trust among banks impede interbank trading and monetary transmission.
  - High excess reserves partly reflect banks’ need for precautionary buffers in a thin market.

### E. Recommendations — instruments, frameworks, and capacity
- Open Market Operations and instruments:
  - Introduce 12-month CD options and utilize T-bills for monetary policy purposes to absorb structural excess liquidity and achieve the target excess reserves of STN 275 million.
  - Continue CD auctions (one-month maturities) or introduce shorter maturities (7 or 14 days) to assess market interest rate signals.
  - Enhance OMO effectiveness by:
    - Promoting transparency on objectives, strategies, and participation criteria.
    - Issuing longer-term instruments for flexibility.
    - Diversifying counterparties to include smaller institutions and non-bank entities.
    - Leveraging electronic trading platforms and establishing frameworks for monitoring and reporting OMO outcomes.
- Required reserves and interest treatment:
  - Calculate the RR base using the average of the last month’s data instead of liabilities with a two-month lag to better reflect current banking conditions and liquidity needs.
  - Consider remunerating RR at or near the targeted policy rate to reduce the spread between lending and deposit rates if the goal is to correct distortions; note tradeoff with objective of draining liquidity cheaply.
- Standing facilities and Emergency Liquidity Assistance (ELA):
  - Standing lending facility: make permanently available (instead of five days), lift access restrictions for eligible institutions with acceptable collateral, set lending facility rate above BCSTP CD rate as a penalty and ceiling for interbank rates, and clearly separate standing lending facility and lender of last resort functions (differentiated by maturity, collateral policy, and pricing).
  - Standing deposit facility: link deposit facility rates to the BCSTP CD rate, ensuring deposit facility rate remains below CD rate to create a corridor and motivate interbank lending.
  - Emergency Liquidity Assistance (ELA): refine framework to distinguish types of liquidity needs (short-term, temporary, resolution-related), standardize rates for each facility, and improve clarity and predictability for institutions seeking liquidity support.
- Interbank market, liquidity forecasting, and BCSTP capacity:
  - Interbank Money Market (IMM): strengthen legal framework, invest in technology and electronic trading infrastructure, make CDs tradable, and establish robust collateral frameworks to build trust and tradability.
  - Liquidity forecasting:
    - Initiate monthly liquidity forecasting, with plans to expand to one-year forecasts once validated.
    - Improve data collection and quality through collaboration with providers; enhance coordination between MEF and BCSTP for government expenditure and revenue forecasts.
    - Employ simple estimation methods using high-frequency data to assess current-month liquidity when lagged data may mislead.
    - Establish daily routines for monitoring bank reserves and expand projections to include maturities of CDs, T-bills, and T-bonds.
  - BCSTP recapitalization: government capital injections (direct transfers or government bonds) and retaining a higher portion of profits to strengthen the BCSTP balance sheet, credibility, and ability to absorb liquidity.
  - Communication and capacity development:
    - enhance transparency through regular reports, press releases, public forums, and meetings with commercial banks to explain policy rationale and build trust.
    - continue strengthening analytical tools and skills; IMF stands ready to provide ongoing technical assistance and training.

### F. Expected policy outcomes and strategic objectives
- Core objectives:
  - A clear BCSTP objective and monetary policy framework are crucial to maintain price stability; interest rates via BCSTP CDs can serve as a benchmark and shape monetary policy over time.
- Anticipated impacts of implementing recommendations:
  - Improve monetary policy implementation and transmission.
  - Help reduce inflation and promote economic growth and development.
  - Strengthen financial stability and the BCSTP’s credibility.

*Source: IMF Selected Issues Paper (sipea2025117), chapter on monetary policy and liquidity management for São Tomé and Príncipe.*

### 1. Bank Assets (Q1-2025)________________________________________________________________ 3

### 1. Bank Assets (Q1-2025)

### A. Introduction — macroeconomic context and purpose
- São Tomé e Príncipe faces significant macroeconomic imbalances driven by:
  - heavy reliance on imports and foreign aid,
  - a narrow production base and limited export capabilities,
  - recent slowdown in economic growth and a marked increase in inflation,
  - declining foreign inflows and a significant reduction in foreign exchange reserves.
- Authorities are enacting reforms to:
  - improve fiscal balances,
  - enhance domestic production capabilities,
  - reduce reliance on imports,
  - create a more resilient framework to withstand external shocks.
- The BCSTP has tightened monetary policy and progressed in developing its liquidity management framework with IMF technical assistance, but additional actions are required.
- Purpose of the paper:
  - provide an overview of the banking system (Section B),
  - assess the monetary policy and liquidity management framework (Section C),
  - describe banking-sector liquidity (Section D),
  - offer recommendations (Section E),
  - conclude (Section F).

### B. Overview of the banking sector — structure, challenges, and credit developments
- Structural features and constraints:
  - small banking sector with high operating costs, low asset quality, and low profitability;
  - limited investment opportunities in the domestic market;
  - significant portion of deposits held in foreign currencies.
- Concentration:
  - the largest bank controls 65 percent of total assets.
- Private sector credit:
  - private sector credit fell sharply since 2019;
  - private sector credit contracted for nearly five years and dropped to less than 8 percent of GDP, down from 24 percent pre-pandemic.
  - credit interest rates have trended down over ten years but remain close to 20 percent.
- Non-performing loans (NPLs) and regulatory response:
  - high NPLs discouraged lending and led banks to hold more liquid assets;
  - uncertainties in judicial enforcement of collateral further discouraged lending.
  - regulatory changes in 2022 on asset classifications, provisioning, and capital adequacy reduced systemwide NPLs to 10 percent of total loans by Q1:2025, down from approximately 34 percent in Q3:2020.

### C. The current monetary policy and liquidity management framework
- Instruments in use:
  - Open Market Operations (OMO) via BCSTP Certificates of Deposit (CDs).
  - Required Reserves (RR).
  - Standing facilities (deposit and lending facilities).
  - Treasury Bills (T-bills) may be used for monetary policy but are primarily issued for budget financing.
  - Refinancing operations in exceptional circumstances using the policy reference rate.
- Open Market Operations:
  - OMO regulation in place since 2014; more actively used to absorb excess liquidity since 2020.
  - allowable operations include outright transactions, repo/reverse repo, and foreign exchange swaps.
  - eligible collateral is broad.
  - CDs maturities range from 1 to 360 days and can be used for short- and long-term sterilization.
  - until November 2021, CDs issued via fixed quantity and rate tenders (predominantly one-month); since July 2022, issuance shifted to fixed-quantity, variable-rate tenders.
- Required Reserves (RR):
  - cornerstone of the framework since 1992.
  - current RR rates:
    - unremunerated reserves set at 28 percent for local currency liabilities (an increase from 18 percent prior to mid-2022),
    - 21 percent for foreign currency liabilities.
  - RR composition: 90 percent in local currency and 10 percent in foreign currency.
  - calculation based on monthly average of deposits recorded in the second month prior to the month of compliance; maintenance period of one month.
- Standing facilities:
  - deposit facility rate: 0 percent (unremunerated);
  - lending facility rate: 10.5 percent;
  - BCSTP key policy rate: 10 percent (not effectively used as a benchmark by banks).
  - both loan and deposit operations are limited to a maturity of five days.
  - due to excess liquidity and unremunerated deposit facility, banks typically do not use the deposit facility and rarely access the lending facility.
- Collateral requirements:
  - acceptable collateral: BCSTP securities, CDs, T-bills, and deposits in foreign currencies.
  - BCSTP CDs and securities valued at face value and must be free from encumbrances.
  - foreign exchange assets valued based on BCSTP exchange rate and at market value; must be free from charges.
  - total collateral required: at least 125 percent of the requested loan amount.
  - eligible instruments accepted only if their value exceeds the bank's reserve requirement at the BCSTP.
- New monetary policy framework:
  - core inflation target: 3.1 percent (six-month moving average, the average before the pandemic).
  - BCSTP aims to keep banks’ excess reserves in local currency below a threshold by issuing CDs at variable rates until the six-month moving average of core inflation falls below the target.
  - current threshold: STN 275 million (previously STN 200 million).
  - BCSTP committed to introducing 12-month CDs to complement existing 1-month, 3-month, and 6-month options to absorb structural excess liquidity.
  - when excess reserves fall below STN 275 million, the MPC may offer limited amounts of CDs monthly to extract interest rate signals.
- Monetary Policy Committee (MPC):
  - established in 2013.
  - composition includes the Governor, Deputy Governor, administrators/directors responsible for liquidity management, markets, economic studies, statistics, supervision, and three senior advisors.
  - MPC sets the policy reference rate and lending facility rate, provides recommendations on financial stability, fiscal policy, and government debt management.
  - MPC convenes quarterly and issues a press release on decisions.
- Interbank Money Market (IMM):
  - regulation effective since 2015 allows banks to exchange funds for up to one year.
  - transactions can be bilateral, collateralized or non-collateralized; eligible collateral includes foreign currency deposits, T-bills, and BCSTP CDs.
  - transactions are required to be conducted in local currency unless collateral is foreclosed.
  - IMM is currently inactive due to insufficient trust among banks and underdeveloped registration and settlement infrastructure.
- Liquidity forecasting:
  - BCSTP initiated liquidity forecasting in 2011 with a one-day model based on anticipated cash flows from autonomous factors and attempted to extend to one month.
  - progress impeded by resource limitations and difficulties obtaining accurate data.
  - Treasury Directorate at the Ministry of Economy and Finance (MEF) has sought to improve cash flow predictability, but government payment timing and withdrawals complicate forecasting.

### D. Key statistics and quantitative facts (preserved exactly as in source)
- Largest bank controls 65 percent of total assets.
- Bank asset shares shown: BISTP 65%, Afriland 15%, Ecobank 9%, BGFI 11%.
- Private sector credit:
  - less than 8 percent of GDP (current),
  - 24 percent (pre-pandemic).
- Lending and deposit rates and targets:
  - current interest rates remain close to 20 percent.
  - BCSTP policy reference rate: 10 percent.
  - lending facility rate: 10.5 percent.
  - deposit facility rate: 0 percent.
- Nonperforming loans:
  - decreased to 10 percent of total loans by Q1:2025,
  - pandemic peak of approximately 34 percent in Q3:2020.
- Required reserves:
  - 28 percent for local currency liabilities (increase from 18 percent prior to mid-2022),
  - 21 percent for foreign currency liabilities,
  - RR composition: 90 percent in local currency and 10 percent in foreign currency.
- CDs:
  - maturities ranging from 1 to 360 days,
  - issuance regime shifted in July 2022 to fixed-quantity, variable-rate tenders.
- Core inflation target: 3.1 percent (six-month moving average).
- Excess reserves threshold: STN 275 million (previously STN 200 million).
- CD tenors in use/planned: 1-month, 3-month, 6-month, and planned 12-month CDs.
- IMM transactions maximum maturity: one year.
- Liquidity forecasting initiative start date: 2011.
- MPC establishment year: 2013.
- Document date (Contents): July 16, 2025.

_International Monetary Fund staff prepared analysis and recommendations for strengthening monetary policy and liquidity management in São Tomé and Príncipe (sections summarized above)._

### 20.      The liquidity dynamics in the system have fluctuated significantly from persistent

### 20.      The liquidity dynamics in the system have fluctuated significantly from persistent 

### Liquidity dynamics: historical evolution and drivers
- Before 2017: persistent structural excess liquidity with excess reserves increasing to a peak of STN 783 million by early 2017. Government spending was the primary driver; banking system hampered by high levels of NPLs, lending risks, and judicial and administrative obstacles.
- 2017–2019: excess reserves decreased steadily, reaching a low of STN 494 million by the end of 2019, mainly due to decreased external support.
- 2020–mid-2022: significant increase in excess reserves during the pandemic crisis, largely driven by external support to mitigate COVID-19 effects.
- Mid-2022 onward: excess liquidity significantly decreased due to fiscal consolidation measures and monetary policy tightening, including increased reserve requirements and BCSTP stopping credit to the government.
- Late 2024–early 2025: excess reserves increased again, driven by foreign exchange inflows from external disbursements and a regulation requiring banks to sell 25 percent of their foreign exchange revenues to the BCSTP.

### Key statistics and market outcomes (preserve source values exactly)
- Peak excess reserves: STN 783 million (early 2017).
- Low in excess reserves: STN 494 million (end-2019).
- BCSTP CD weighted average interest rates: 1.3 percent in July 2022 to 4.6 percent by December 2024.
- T-bill interest rates: approximately 4 percent in mid-2022 to 6.2 percent in April 2024.
- MEF two-year T-bonds: interest rates ranging from 4 to 6 percent.
- Short-term deposit interest rates (banking system): 2.3 percent in mid-2022 to 2.6 percent by December 2024.
- Six-month moving average of core inflation: approximately 12 percent (mid-2022 to end-2023) to 3.3 percent by December 2024.
- Stock of CDs: rose to STN 335 million by mid-February 2025—50 percent higher than excess reserves in January 2025.
- BCSTP target for excess reserves: STN 275 million.
- Regulation: banks required to sell 25 percent of their foreign exchange revenues to the BCSTP.
- Market concentration: one commercial bank holds around two-thirds of the total liquidity surplus.

### Challenges in liquidity absorption and market functioning
- Uneven distribution of excess liquidity limits effective absorption; not all surplus is available due to transactional and precautionary needs.
- Lack of a functioning standing credit facility, weak interbank market, absence of acceptable collateral, and low trust among banks impede interbank trading and monetary transmission.
- High excess reserves partly reflect banks’ need for precautionary buffers in a thin market.

### Recommendations — Open Market Operations and instruments
- Introduce 12-month CD options and utilize T-bills for monetary policy purposes to absorb structural excess liquidity and achieve the target excess reserves of STN 275 million.
- Continue CD auctions (one-month maturities) or introduce shorter maturities (7 or 14 days) to assess market interest rate signals.
- Enhance OMO effectiveness by:
  - Promoting transparency on objectives, strategies, and participation criteria.
  - Issuing longer-term instruments for flexibility.
  - Diversifying counterparties to include smaller institutions and non-bank entities.
  - Leveraging electronic trading platforms and establishing frameworks for monitoring and reporting OMO outcomes.

### Recommendations — Required reserves and interest treatment
- Calculate the RR base using the average of the last month’s data instead of liabilities with a two-month lag to better reflect current banking conditions and liquidity needs.
- Consider remunerating RR at or near the targeted policy rate to reduce the spread between lending and deposit rates if the goal is to correct distortions; note tradeoff with objective of draining liquidity cheaply.

### Recommendations — Standing facilities and ELA
- Standing lending facility: make permanently available (instead of five days), lift access restrictions for eligible institutions with acceptable collateral, set lending facility rate above BCSTP CD rate as a penalty and ceiling for interbank rates, and clearly separate standing lending facility and lender of last resort functions (differentiated by maturity, collateral policy, and pricing).
- Standing deposit facility: link deposit facility rates to the BCSTP CD rate, ensuring deposit facility rate remains below CD rate to create a corridor and motivate interbank lending.
- Emergency Liquidity Assistance (ELA): refine framework to distinguish types of liquidity needs (short-term, temporary, resolution-related), standardize rates for each facility, and improve clarity and predictability for institutions seeking liquidity support.

### Recommendations — Interbank market, liquidity forecasting, and BCSTP capacity
- Interbank Money Market (IMM): strengthen legal framework, invest in technology and electronic trading infrastructure, make CDs tradable, and establish robust collateral frameworks to build trust and tradability.
- Liquidity forecasting:
  - Initiate monthly liquidity forecasting, with plans to expand to one-year forecasts once validated.
  - Improve data collection and quality through collaboration with providers; enhance coordination between MEF and BCSTP for government expenditure and revenue forecasts.
  - Employ simple estimation methods using high-frequency data to assess current-month liquidity when lagged data may mislead.
  - Establish daily routines for monitoring bank reserves and expand projections to include maturities of CDs, T-bills, and T-bonds.
- BCSTP recapitalization: government capital injections (direct transfers or government bonds) and retaining a higher portion of profits to strengthen the BCSTP balance sheet, credibility, and ability to absorb liquidity.
- Communication: enhance transparency through regular reports, press releases, public forums, and meetings with commercial banks to explain policy rationale and build trust.
- Capacity development: continue strengthening analytical tools and skills; IMF stands ready to provide ongoing technical assistance and training.

### Expected policy outcomes and strategic objectives
- A clear BCSTP objective and monetary policy framework are crucial to maintain price stability; interest rates via BCSTP CDs can serve as a benchmark and shape monetary policy over time.
- Implementing recommendations (diverse CDs, improved RR system, enhanced standing facilities, liquidity forecasting, improved communication, recapitalization) should:
  - Improve monetary policy implementation and transmission.
  - Help reduce inflation and promote economic growth and development.
  - Strengthen financial stability and the BCSTP’s credibility.

*Source: IMF Selected Issues Paper (sipea2025117), chapter on monetary policy and liquidity management for São Tomé and Príncipe.*

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_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025117.pdf_