Cabo Verde’s economy is expected to grow at a rate of 5.2% in 2019, after posting growth of 5.7% in the first half of the year, according to a report drawn up by the evaluation mission of the International Monetary Fund (IMF) published on Monday in Washington.
The Mission, headed by Malangu Kabedi-Mbuyi, paid a visit to Praia and the island of Boa Vista between 3 and 16 December 2019 to meet with the country’s authorities as part of the first evaluation of Cabo Verde’s Policy Coordination Instrument (PCI) programme.
The report noted that inflation remained low, and the forecast for the end of the year is growth of 1.0%, that the external position has continued to improve in 2019, reflecting a good ongoing performance of exports of goods and services, particularly tourism, and growth of remittances, as well as the deceleration of imports.
Forecasts for 2019 point to a decrease in the current account deficit to 2.5% of GDP in 2019, compared to 5.3% of GDP in 2018, and the IMF expects international reserves to cover over five months of imports of goods and services.
“The budgetary position should show further improvements in 2019 and 2020, and revenue collection improved in comparison with the previous year, although it was situated slightly below the forecast, mainly due to the negative effect of deceleration of imports on tax on international trade, and delays in the payment of donations,” it said.
The IMF projects a deficit of 1.7% of GDP in the State General Budget for 2020, based on a forecast of continued solid economic growth and the introduction of measures to broaden the tax base, improve tax compliance, improve the efficiency of the agencies responsible for the collection of revenue and strengthen the management of investment spending.
The members of the mission also said that budgetary consolidation efforts, together with advances in reforms of state companies, are expected to contribute to bringing public debt to approximately 119% of GDP at the end of 2020.