São Tomé and Príncipe economy expected to grow 5.6% this year

São Tomé and Príncipe’s economy is expected to grow 5.6% this year and 5.4% in 2018 due to increased foreign investment in construction and tourism, according to the “African Economic Outlook 2017.”

The report, prepared by the African Development Bank, the Organisation for Economic Cooperation and Development and the United Nations Development Programme, points out that the archipelago’s gross domestic product grew by 5.0% in 2016, an increase of one percentage point over the previous year.

According to the report the forecast drop of 20 basis points for 2018 compared to this year is due to the fact that in that year will be a reduction in contributions from international organisations and donor countries.

The report says that obtaining internal resources to finance public spending is “a great challenge,” which is further aggravated by the fact that the archipelago has high public debt, which in 2015 was estimated at 75% of Gross Domestic Product (GDP).

The government of São Tomé and Príncipe will adopt some measures, the report noted, such as applying a 25% tax on alcoholic beverages, the creation of a tax court and updating the tax code. (macauhub)