{
  "title": "Strengthening Inflation Forecasting in São Tomé and Príncipe",
  "publication": "Selected Issues Papers, July 16, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2025/08/22/strengthening-inflation-forecasting-in-so-tom-and-prncipe-569890",
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  "summary": "This paper examines the drivers of inflation in São Tomé and Príncipe and develops a model for forecasting it. It finds that both supply and demand factors contribute to inflation in the country.",
  "sections": [
    {
      "heading": "Summary and purpose",
      "content": "- Examines the drivers of inflation in São Tomé and Príncipe and develops a model for forecasting it.\n- Finds that both supply and demand factors contribute to inflation in the country.\n- Concludes that to effectively reduce and manage inflation, a comprehensive policy mix must address both supply and demand factors."
    },
    {
      "heading": "Key findings on inflation drivers",
      "content": "- Supply-side factors:\n  - Inflation inertia.\n  - Import food prices.\n  - Global or regional crises.\n- Demand-side factors:\n  - Weakened macroeconomic discipline in the leadup to elections (demand shocks).\n- Overall assessment:\n  - Both supply and demand shocks are important for inflation dynamics in São Tomé and Príncipe."
    },
    {
      "heading": "Methodology and technical approach",
      "content": "- Forecasting framework:\n  - Uses an Autoregressive Distributed Lag (ARDL) model (keyword explicitly listed: Autoregressive Distributed Lag (ARDL) model).\n- Relevant technical concepts highlighted:\n  - Inflation inertia.\n  - Nominal effective exchange rate.\n  - Pegged exchange rate regime.\n  - VAT impact and value-added tax considerations."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- A comprehensive policy mix is required to effectively reduce and manage inflation.\n- Policy design should explicitly address:\n  - Supply-side measures to mitigate imported food-price shocks and to strengthen resilience to global/regional crises.\n  - Demand-side measures to maintain macroeconomic discipline, particularly around electoral periods."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Authors: Alsis Cruz, Dilson Tiny, Bahrom Shukurov\n- Date: July 16, 2025\n- Series: Selected Issues Paper No. 2025/116\n- Pages: 20\n- Volume: 2025\n- Issue: 116\n- DOI: https://doi.org/10.5089/9798229022712.018\n- Stock No: SIPEA2025116\n- ISBN: 9798229022712\n- ISSN: 2958-7875\n- Subject and keywords: Economic forecasting; Exchange rate arrangements; Foreign exchange; Inflation; Nominal effective exchange rate; Prices; Taxes; Value-added tax; Autoregressive Distributed Lag (ARDL) model; inflation inertia; pegged exchange rate regime; policy mix; São Tomé and Príncipe; supply and demand shocks; VAT impact\n\nSource: \"Strengthening Inflation Forecasting in São Tomé and Príncipe\", Selected Issues Papers 2025/116, July 16, 2025. DOI: https://doi.org/10.5089/9798229022712.018\n\n---\n\n Content in this bundle\n\n- Sipea2025116\n  - Sipea2025116 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Sipea2025116 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/08/22/strengthening-inflation-forecasting-in-so-tom-and-prncipe-569890"
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    "Authors: Alsis Cruz, Dilson Tiny, Bahrom Shukurov",
    "Published: July 16, 2025",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798229022712.018",
    "Examines the drivers of inflation in São Tomé and Príncipe and develops a model for forecasting it.",
    "Finds that both supply and demand factors contribute to inflation in the country.",
    "Concludes that to effectively reduce and manage inflation, a comprehensive policy mix must address both supply and demand factors.",
    "Supply-side factors:",
    "Demand-side factors:",
    "Overall assessment:",
    "Forecasting framework:",
    "Relevant technical concepts highlighted:",
    "A comprehensive policy mix is required to effectively reduce and manage inflation.",
    "Policy design should explicitly address:",
    "Authors: Alsis Cruz, Dilson Tiny, Bahrom Shukurov",
    "Date: July 16, 2025",
    "Series: Selected Issues Paper No. 2025/116",
    "Pages: 20",
    "Volume: 2025",
    "Issue: 116",
    "DOI: https://doi.org/10.5089/9798229022712.018",
    "Stock No: SIPEA2025116",
    "ISBN: 9798229022712",
    "ISSN: 2958-7875",
    "Subject and keywords: Economic forecasting; Exchange rate arrangements; Foreign exchange; Inflation; Nominal effective exchange rate; Prices; Taxes; Value-added tax; Autoregressive Distributed Lag (ARDL) model; inflation inertia; pegged exchange rate regime; policy mix; São Tomé and Príncipe; supply and demand shocks; VAT impact",
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