Standard & Poor’s (S&P) lowered Cape Verde’s rating to ‘B-‘ as a result of the severe economic impact of the covid-19 pandemic, namely in tourism and accommodation sector.
Like stated by S&P analysts pandemic “severely” reduced earnings related to tourism to Cape Verde and “significantly increased the current account deficit”, but assume that the outlook is “stable”, with a “gradual economic recovery”.
As per the report released by S&P Cape Verde should had closed 2020 with 14.9% drop of GDP and that only by 2024 economy will return to the growth levels of 2019 a year that tourism directly or indirectly accounted to nearly 25% of GDP and that 819 thousand tourists visited the archipelago comprised by 10 islands.
Despite the effects of covi19 pandemic, S&P states that “Cape Verde’s economy has continued to grow at a rapid pace, thanks to an increase in the tourism sector and plans to transform Sal into a multicontinental airport platform” and that “the moment of steady economic growth must continue, with fiscal discipline, and with revenue-strengthening measures to reduce substantial budgetary imbalances in the medium term”.
S&P points that although high as a percentage of GDP, Cape Verde debt is low in absolute terms and that economic outlook “remains broadly favourable, concentrated in the tourism sector and supported by the fact that it has one of the most stable political and institutional frameworks in Africa”