São Tomé and Príncipe: Request for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility
IMF Staff Country Reports, September 8, 2005
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- São Tomé and Príncipe: Request for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility
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Bibliographic details
- Published: September 8, 2005
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451925494.002
Overview
- Paper reviews the request from the São Tomé and Príncipe authorities for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility (PRGF).
- Publication details: Pages: 100; Volume: 2005; Issue: 323; Series: Country Report No. 2005/323; DOI: https://doi.org/10.5089/9781451925494.002; Stock No: 1STPEA2005001; ISBN: 9781451925494; ISSN: 1934-7685.
- Subject tags: Arrears, Commodities, External debt, Oil, Oil, gas and mining taxes, Poverty, Poverty reduction, Poverty reduction strategy, Taxes.
- Keywords include: Africa, Arrears, CR, gas and mining taxes, government, ISCR, Oil, Poverty reduction, Poverty reduction strategy, PRGF arrangement, staff appraisal, STP authorities, tax issue, tax procedural code, tax violation.
Macroeconomic developments (2004)
- Real GDP growth: economy continued to grow at a moderate pace in 2004.
- Inflation: increased to 15 percent by year-end.
- Banking and fiscal developments:
- Bank credit to the private sector rose sharply in 2004.
- The government loosened fiscal policy in 2004.
Proposed program objectives (2005–07)
- Program aim: correcting macroeconomic imbalances and setting the conditions for sustained strong growth.
- Time frame: 2005–07 (Three-Year Arrangement under PRGF).
- Growth projection: Real GDP growth is envisaged to slow down in 2005 in response to tight financial policies.
Key findings and implications
- Rising private sector credit and loosened fiscal policy in 2004 coincided with a rise in inflation to 15 percent by year-end.
- Tightening financial policies in 2005 are expected to moderate growth in the short run (real GDP growth envisaged to slow down in 2005).
- The 2005–07 program targets macroeconomic stabilization as a precondition for sustained strong growth.
Noted focuses for policy and reform
- Correct macroeconomic imbalances through the PRGF-supported program for 2005–07.
- Implied need for tighter financial policies in 2005 to address inflationary pressures from 2004 developments.
- Fiscal and banking sector measures implied to curb rapid credit expansion and loosened fiscal policy experienced in 2004.
International Monetary Fund. "São Tomé and Príncipe: Request for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility", IMF Staff Country Reports 2005, 323 (2005), DOI: https://doi.org/10.5089/9781451925494.002.