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Laboratoire de la finance africaine

Sao Tome & Principe

Aperçu 2023
Annual current GDP growth (%) : 4.1
GDP (USD billions) : 0.573
Population (Thousands) : 0.227 
Economic performance and outlook

The economy of São Tomé and Príncipe contracted by an estimated 6.4% in 2020, after growing by 2.2% in 2018 and 1.3% in 2019. The contraction in output, for the first time in a decade, is attributed to a sharp decline in tourism and service sectors, which were severely hurt by weak external and domestic demand and COVID–19 containment measures. Subdued aggregate demand also hurt the hotels and restaurants, transport, construction, and manufacturing sectors, while cocoa exports were disrupted by widespread international border closures. Monetary policy was accommodative to support growth. To help bank lending to a distressed private sector, the central bank reduced the minimum reserve requirements—from 21% in 2019 to 17% in 2020 for foreign-currency denominated accounts and from 18% to 14% for domestic currency accounts. Annual inflation increased to 9.1% in 2020 from 7.7% in 2019 due to pandemic-related shortages of food and other essential goods. The fiscal deficit was estimated to widen to 5.0% of GDP in 2020 from 2.4% in 2019, as spending related to COVID–19 increased and tax revenues fell. The deficit is being financed through external borrowing. Public debt rapidly rose to 104.9% of GDP in 2020 from 94.8% in 2019. The current account deficit widened to 17.5% of GDP in 2020 from 16.6% in 2019, mainly due to the reduction in tourism and cocoa receipts. Nonetheless, official reserves improved to four months of import cover from three months in 2019, boosted by budget support inflows. The banking sector remained stable, but non-performing loans increased to 28% in June 2020 from 26.7% a year earlier, as weak economic activity caused by the pandemic put pressure on borrowers’ ability to repay their loans. (Download detailed Analysis Source : Report African Economic Outlook 2021 ; AfDB)