Democratic Republic of São Tomé and Príncipe: 2025 Article IV Consultation, First Review Under the Extended Credit Facility Arrangement, Request for Waivers of Nonobservance of Performance Criteria, Modification of Performance Criteria, and Financing

This paper presents Democratic Republic of São Tomé and Príncipe’s 2025 Article IV Consultation, First Review under the Extended Credit Facility Arrangement, Request for Waivers of Nonobservance of Performance Criteria, Modification of Performance Criteria, and Financing Assurances Review. Performance under the ECF Arrangement has been satisfactory with respect to the quantitative targets, with eight of the ten end-December 2024 quantitative performance criteria being met. São Tomé and Príncipe’s economy is gradually recovering from recent shocks. Gross domestic product growth strengthened to 1.1 percent in 2024 and is projected to accelerate to 2.9 percent in 2025 and 4.7 percent in 2026, remaining robust over the medium term. Accelerating the implementation of structural reforms is an imperative to enhance the export base and promote job-rich, inclusive growth. Important measures include addressing bottlenecks to private sector development and expanding air transport connectivity to stimulate tourism expansion. The authorities are also focused on enhancing resilience to climate-related shocks and accelerating initiatives that promote women’s economic empowerment.