State budget proposal for 2011 to increase sovereign debt in Cape Verde

20 May 2011

Praia, Cape Verde, 20 May – The Cape Verdean state budget for 2011 include an increase in sovereign debt to 81.5 percent of gross domestic product (GDP) as compared to 75.4 percent in 2010, the Cape Verdean minister for Finance and Planning, Cristina Duarte said in Praia.

Noting that debt was, “within sustainable limits,” the minister noted that an agreement had been signed in 2008 with the international Monetary Fund (IMF) to define a “programmed trajectory” for construction of infrastructures, “which justifies the increase in the budget deficit and sovereign debt.”

On the basis of the agreement, she said, Cape Verde was expected to see a downward trajectory to its debt, “starting this year in which the budget deficit will fall to 10.3 percent, after reaching 13.6 percent in 2010.”

The minister also said that a drop in the budget deficit was also projected in 2012 to 9.2 percent and 6.7 percent in 2013, but noted that these figures depended on the capacity to carry out the Investment Programme.

In relation to inflation outlined in the budget, of between 3 and 4 percent (a significant rise against the 2.1 percent seen in 2010), Duarte noted inflationary pressure seen on an international level, “largely the fault of products of basic necessity and, mainly, fuel.” (macauhub)