Democratic Republic of São Tomé and Príncipe: Selected Issues
IMF Staff Country Reports, August 8, 2025
Source details
- Canonical URL
- Democratic Republic of São Tomé and Príncipe: Selected Issues
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Bibliographic details
- Published: August 8, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229020435.002
Summary and key findings
- The paper examines the drivers of inflation in São Tomé and Príncipe and develops a model for forecasting it.
- Inflation significantly declined under the peg regime, but recent surges in global food and energy prices have exerted substantial upward pressure on inflation.
- Both supply and demand factors contribute to inflation in the country.
Drivers of inflation
- Supply-side factors:
- Inflation inertia.
- Import food prices.
- Global or regional crises.
- Demand-side factors:
- Factors associated with weakened macroeconomic discipline in the leadup to elections.
Modeling and forecasting
- The paper develops a model for forecasting inflation in São Tomé and Príncipe (details in the full Selected Issues paper).
Policy recommendations
- Comprehensive policy mix must address both supply and demand factors.
- Demand-side measures:
- Maintain coherent macroeconomic policies.
- Ongoing fiscal consolidation.
- Manage public debt levels to create a more stable economic environment.
- Supply-side measures:
- Increase local food production to reduce reliance on imported food.
- Improve processing of primary agricultural products to add value and reduce waste, thereby making local food more competitive against imports.
Subject areas and keywords
- Subject: Asset and liability management, Environment, Inflation, Infrastructure, Liquidity, Liquidity management, National accounts, Natural disasters, Prices
- Keywords: forecasting inflation, Global, Inflation, inflation development, inflation structure, Infrastructure, Liquidity, Liquidity management, Natural disasters, São Tomé and Príncipe's vulnerability, Sub-Saharan Africa, vulnerability to natural disasters, West Africa
Content in this bundle
- 1stpea2025003-source-pdf