Cape Verde: Macroeconomic performance remains “robust” but there are new challenges, IMF warns

15 April 2009

Praia, Cape Verde, 15 April – Cape Verde’s macroeconomic performance “remains robust,” but current economic global difficulties, “will pose new challenges” to the Cape Verdean economy, an International Monetary Fund (IMF) official said Tuesday in Praia.

At a press conference, Gambian economist and director of the Africa Department Division of the IMF, Lamin Leigh also announced a one-year extension of the Policy Support Instrument (PSI) signed between the IMF and Cape Verde in July 2006 and which was due to end next July.

Two weeks ago in Cape Verde, the IMF delegation, alongside the Cape Verdean authorities, undertook the sixth review of the PSI, and an one-year extension was granted, which will be presented to the IMF Executive Council in June and will make it possible to sign an identical three-year agreement, with new targets, as of 2010.

“Current global economic difficulties will pose new challenges to the Cape Verdean economy,” Leigh said, noting that the growth rate of the country’s Gross Domestic Product (GDP) was likely to “slow” as a result of the world slowdown in the Tourism sector and influxes of Foreign Direct Investment (FDI).

Leigh added that the IMF supported fiscal stimulus measures adopted by the government, as well as plans to “maintain social spending in the budget,” as the global crisis, “is expected to affect, in a particularly severe way, the poorest and most vulnerable sectors of the population.” (macauhub)