Cape Verde: IMF says it is impressed with Cape Verdean economy

2 July 2008

Washington, United States, 2 July – Cape Verde has had “impressive” economic performance, but should maintain a prudent fiscal policy to ensure its capacity to resist shocks, the International Monetary Fund (IMF) said Monday.

The IMF executive council Monday completed an assessment of the Cape Verdean economy for the last three years, under the terms of the Policy Support Instrument (PSI), a programme designed by the IMF for low income countries and island nations that may not need or want financial aid, but continue to seek “advice, inspection and support from the IMF for their policies.”

In Cape Verde’s case, the PSI was drawn up to “strengthen the sustainability of growth and development, maintaining a stable macroeconomic climate and to move ahead with structural reforms.”

The deputy administrative director and interim president of the IMF, Takatoshi Kato, praised “the impressive economic performance of Cape Verde over the last few years, which reflects a prudent macroeconomic administration and economic reforms.”

“The continuation of a prudent fiscal policy will be critical to ensure interchange and strengthen resistance to shocks,” Kato said noting that, under the terms of the programme, Cape Verde fulfilled its internal debt commitments two years ahead of schedule.

Takatoshi Kato said that the Cape Verde export base remained small and the the current boom in the tourism sector should be used as a “window of opportunity to facilitate development of the private sector and increase economic diversification.”

“Diversifying the economy remains an important strategic objective to increase resistance to shocks,” he said. (macauhub)