Cape Verde economy “remains solid,” International Monetary Fund says

2 August 2006

Washington, United States, 02 Aug – The Cape Verdean economy remains “solid” and prospects for economic growth are “good” over the next few years, said the deputy executive director of the International Monetary Fund (IMF), Augustín Carstens.

“The good prospects for investment, particularly in tourism and development of infrastructures, is a good indication of growth for the next few years,” Carstens said.

“Although inflation has recently increased, driven by temporary increases in the price of food and international oil prices, it should fall sharply next year,” he said.

The statement from Carstens was issued at the same time as the IMF approved a three-year Policy Support Instrument (PSI) to support “Cape Verde’s efforts at economic reform.”

According to Carstens, those instruments are attributed to low income countries that “may not need or want financial help from the IMF but which are still looking for advice and support from the IMF on it policies.”

The PSI for cape Verde was drawn up to “strengthen the sustainability of growth and development, maintaining a stable macroeconomic climate and to move ahead with structural reforms.”

In a supplement that accompanied his statement, the IMF gave figures for the Cape Verde economy and projected that this year the country’s gross domestic product (GDP) will grow 5.5 percent this year.

Inflation is expected to increase by 6.2 percent, said the IMF. (macauhub)