Press Release No. 25/356

IMF Reaches Staff-Level Agreement with São Tomé and Príncipe on the Second Review under the Extended Credit Facility Arrangement

November 6, 2025

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
  • IMF staff and the São Toméan authorities have reached a staff-level agreement on the second review of the economic policies underpinned by the 40-month ECF-supported program. Most quantitative targets for the second review have been met and significant progress was made on a range of macro-structural issues.
  • The authorities have made progress in preserving macroeconomic stability, despite the ongoing energy crisis. They are committed to improving the fiscal position and advancing the government’s reform agenda. Growth has been revised down to 2.1 percent in 2025 and inflation has picked up in recent months, despite a tight monetary stance. Growth is expected to pick up and inflation to gradually decelerate over the medium term.
  • The authorities remain committed to the objectives established in the ECF-supported program approved by the IMF Executive Board in December 2024.

Washington, DC: An International Monetary Fund (IMF) staff team, led by Mr. Slavi Slavov, Mission Chief for São Tomé and Príncipe, held meetings in São Tomé during October 23-November 5, 2025, to discuss progress on the authorities’ reforms and policy priorities in the context of the second review of São Tomé and Príncipe’s 40-month program supported by the Extended Credit Facility (ECF). The arrangement was approved by the IMF Executive Board for a total amount of SDR18.5 million (around US$25 million) on December 19, 2024.

At the conclusion of the visit, Mr. Slavov issued the following statement:

“The São Toméan authorities and IMF staff team have reached a staff-level agreement on the steps needed to conclude the second review of São Tomé and Príncipe’s economic program supported by the ECF arrangement. Subject to approval by the IMF’s Executive Board, São Tomé and Príncipe would have access to about SDR 2.1 million (US$2.8 million), bringing the total IMF financial support disbursed under the current arrangement to around SDR 10.1 million (about US$13.4 million).

“São Tomé and Príncipe is facing unfavorable demographics, a shock to electricity supply, and delays in the energy transition. Prolonged power outages pose severe risks to economic recovery. The São Toméan economy remains relatively resilient, despite stubbornly high inflation, a tight policy mix, and the country’s vulnerability to climate change and natural disasters. Inflation picked up in recent months, hovering in the low double digits, mostly due to supply constraints and some demand-related factors. Core inflation has also gone up. The pegged exchange rate has served as an anchor to support domestic stability, but the widening inflation differential with the Euro Area puts pressure on the fragile external position of the country.

“Growth is expected to accelerate to 3.9 percent in 2026, and settle at around 3.3 percent over the medium term. This reflects the resilience of the agriculture sector and tourism, as well as a pickup in remittances and public investment. In the medium-term, growth is expected to be hindered by the demographic outlook. The IMF-supported program plays a catalytic role in mobilizing financial support and technical assistance from the country’s main development partners. Low international oil prices helped to reduce fiscal and external sector pressures—supporting reserve accumulation—a key pillar of the ECF program. Reforming the energy sector remains essential to unlocking growth and alleviating pressures on public debt and foreign exchange reserves.

“The Fund-supported program continues to play a pivotal role in supporting macroeconomic stability, fostering structural reforms, and catalyzing support from other development partners.

“The IMF staff team met 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; other government officials; representatives of the private sector including commercial banks; and development partners. The mission expresses its deep appreciation to the authorities for their cooperation, hospitality, and constructive policy discussions.”

 

 

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Phone: +1 202 623-7100Email: MEDIA@IMF.org