The International Monetary Fund (IMF) anticipates favorable economic prospects for Cape Verde.
Cape Verde is projected to achieve economic growth of 6% in 2024, according to IMF forecasts following the conclusion of a two-week mission in Praia. The institution attributes this momentum to a rebound in tourism, robust exports, and an increase in private consumption.
"Macroeconomic performance is expected to remain strong in 2024 [...], with low inflation, a narrow current account deficit, and adequate international reserves to protect the exchange rate peg," the IMF noted.
The public debt-to-GDP ratio is expected to continue declining, reflecting sustained high growth and a primary fiscal surplus, the organization added. The IMF also praised the progress made by the country's authorities in implementing economic reforms.
According to Justin Tyson, head of the mission, "All performance criteria under the ECF were met, except for the target on gross international reserves, for which the Banco de Cabo Verde has implemented corrective measures." Indicative targets and structural benchmarks were also achieved through September 2024, except for three reform measures under the Resilience and Sustainability Facility (RSF), which were deferred to the next review.
In the short term, the institution expects Cape Verde's economic growth to gradually converge toward a rate of 4.8% by 2029. Inflation is projected at less than 2% in 2024, aligning with the Eurozone, and the current account deficit is expected to stabilize at around 2.5% of GDP over the medium term.
