IMF praises Cape Verde’s “prudence” and notes “clear signs” of economic recovery

28 September 2010

Praia, Cape Verde, 28 Sept – the International Monetary Fund (IMF) Monday praised the Cape Verdean government’s, “prudence” with the head of the mission, Valerie Cerra noting that the main challenge was the “efficient” execution of the public investment programme.

At the end of two weeks of assessment of the archipelago’s macro-economy, which is part of the Policy support Instrument (PSI), Cerra said that the archipelago’s economy was showing clear signs of recovery, following the global crisis, and was well-placed for strong growth in the mid-term and noted the “wide variety of indicators,” that made it possible to come to this conclusion.

The business confidence indicators, tax revenues and import figures showed, “a wide-ranging recovery of economic activity,” which, according to Cerra, is gaining strength as the year goes on.

According to the head of the IMF mission, the tourism sector ”stabilised” in the first half of this year and was experiencing “solid growth” in the second half and inflation remained at “low levels,” whilst foreign reserves “continue to grow.”

“This favourable economic performance is due, mainly, to prudent macroeconomic management, including robust counter-cycle public policies, she noted.

Therefore, Cerra added, the IMF would continue to support the Cape Verdean authorities’ strategy to “temporarily accelerate,” public investments (31 billion escudos/ 281.1 million euros) and its social protection policies.

For the next PSI – the first is due to end this year (2007/10) – Cape Verde should boost its reforms for strengthening management of public debt, further increasing transparency and equal treatment in the tax area, with greater focus on developing financial markets and safeguarding the financial system.

The IMF, according to Cerra, is likely to approve the Cape Verdean public policy programme at its board meeting in November. (macauhub)