Democratic Republic of São Tomé and Princípe

The economy is expected to grow at a steady pace of 4 percent in 2017, albeit slower than projected at the second review. Over the medium term, growth is projected to accelerate to 5½ percent, spurred by tourism, agriculture, and externally-funded investment. Meanwhile, excessive rainfall damaged some crops and raised the price of locally-produced food. Consequently, inflation is expected to increase to 6 percent at end-2017, from 5.1 percent at end-2016. Program implementation is broadly back on track. After missing the end-2016 fiscal targets by large margins, the government adopted corrective measures and met all five end-June 2017 performance criteria (PCs). The implementation of structural reforms under the program is progressing, albeit at a much slower pace than anticipated due mainly to capacity constraints and delays in the delivery of technical assistance (TA).