## 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](https://www.imf.org/en/publications/cr/issues/2025/08/08/democratic-republic-of-so-tom-and-prncipe-selected-issues-569496)

## Other formats

- [Markdown version](/en/publications/cr/issues/2025/08/08/democratic-republic-of-so-tom-and-prncipe-selected-issues-569496/index.md)
- [Structured JSON version](/en/publications/cr/issues/2025/08/08/democratic-republic-of-so-tom-and-prncipe-selected-issues-569496/index.json)
- [Bundle manifest](/en/publications/cr/issues/2025/08/08/democratic-republic-of-so-tom-and-prncipe-selected-issues-569496/bundle-manifest.json)

## Bibliographic details
- Published: August 8, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229020435.002

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### 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

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## Content in this bundle

- **1stpea2025003-source-pdf**
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_Source: https://www.imf.org/en/publications/cr/issues/2025/08/08/democratic-republic-of-so-tom-and-prncipe-selected-issues-569496_