Praia, Cape Verde, 16 Aug – Cape Verde’s current account deficit increased by 23 percent year-on-year in the second quarter of 2011 reaching 7.666 billion Cape Verdean escudos (US$97 million), the Bank of Cape Verde said.

In the first quarter of the year the country’s current account deficit totalled 4.380 billion Cape Verdean escudos, leading to a 75 percent rise in the figure posted in the second quarter.

A country’s current account balance is an economic aggregate representing the sum of trade in goods (balance of trade), tourist spending, transport and insurance (balance of services), of interest and international dividends and income of nationally-owned companies that operate abroad (balance of income) and of one-way transfers.

According to the figures from the Bank of Cape Verde, in the period the economy was mainly funded through public debt (58%), due to the weak performance of foreign direct investment (FDI).

The current account deficit was affected by an increased balance of trade deficit and a drop in the current transfer surplus.

Figures from the central bank also showed that the trade deficit increased 17.6 percent year-on-year, mainly due to increased imports.

The balance of services was the most dynamic component of the current account balance and in the second posted a net balance of 5.112 billion Cape Verdean escudos (CVE), or around 451 million more than in the same period of 2010.

Growth in the balance of services was mainly due to a 13.9 percent rise in gross tourism revenues.

Remittances from emigrants rose 36.4 percent year-on-year in the second quarter, thus continuing a trend that began in the second quarter of 2010. (macauhub)