After two years marked by sluggish growth, São Tomé and Príncipe’s economy is expected to begin a gradual recovery in the coming years.
The International Monetary Fund forecasts economic growth of around 2.75% over the medium term, driven notably by the resilience of the agricultural sector, the recovery of tourism activity, financial transfers from the diaspora, and continued public investment.
However, the IMF believes that demographic trends will continue to weigh on long-term growth potential, limiting the prospects for expansion of the Santomean economy.
The organization also emphasizes the importance of ongoing reforms in the energy sector. A lasting improvement in electricity supply is considered essential to support economic activity, reduce constraints on businesses, and strengthen the stability of public finances as well as foreign exchange reserves.
In the short term, however, the outlook remains fragile. The IMF has revised its 2025 growth forecast downward to 1%, before an expected slowdown to 0.4% in 2026. This situation is explained notably by persistent power cuts, delays in the energy transition, and rising global oil prices amid geopolitical tensions in the Middle East.
These findings come as part of the third review of the 52-month program supported by the Extended Credit Facility (ECF). IMF staff and the authorities of São Tomé and Príncipe have also reached a staff-level agreement, paving the way for a new disbursement of $6.1 million, subject to final approval by the Fund’s Executive Board.
Economy
