Cape Verde: Economic growth forecast 7.7 percent in 2008, IMF says

30 January 2008

Washington, United States, 30 Jan – Cape Verde’s economic growth in 2008 is expected to be 7.7 percent, according to and International Monetary Fund (IMF) document published on its website Tuesday.

According to the IMF, which published the document on the third review of the Policy Support Instrument (PSI), the growth of Cape Verde’s economy will be driven by investment in tourism and “other services” as well as by investment in public infrastructure.

Inflation is estimated to total some 4 percent in the year.

The IMF also estimated that the growth of Cape Verde’s economy in 2007 was 6.9 percent and that inflation totaled 4.9 percent.

The government’s macro-economic policy, the IMF said, would be focused on four areas in 2008: Consolidation of macro-economic stability, via the reduction of public debt and increased net currency reserves in the Bank of Cape Verde; improved financial management of the public sector; reduction of tax risk; and boosted regulation and supervision of the financial sector.

These are some of the tasks the IMF considers to be vital for Cape Verde, as it is graduating to become a Medium Income Country, to become “less dependent on international aid in the future,” and “less vulnerable to shocks.”

However, it said that “recent economic indicators showed string growth, a fall in the unemployment rate and modest inflation.”

Amongst the political priorities for 2008 is also the reform of the energy sector. Amongst the IMF’s recommendations, which are also part of Government policy, are the creation of standard tariffs for electricity and an adjustment mechanism for oil-derived fuel prices. (macauhub)