Cape Verdean economy expands by lower-than-expected 5.1 pct in 2011

27 June 2012

The rate of growth of the Cape Verdean economy slowed to 5.1 percent in 2011 against an initial projection of 5.6 percent according to the Bank of Cape Verde, according to a report on 2011 published Monday in the archipelago’s capital city, Praia.

Despite the slowdown, the cape Verdean central bank said that even so the archipelago’s economy had shown itself to be flexible in relation to the financial crisis in the country’s largest partner – the Euro Zone – supporting itself, mainly, on private and public investments and, in terms of business sectors, on its performance in tourism, industry, and fishing.

Inflation totalled 4.5 percent as a result of increases in the international prices of energy and processed food, which are essentially imported goods.

“Foreign accounts deteriorated significantly in 2011 and the deficit totalled 17 percent of GDP, driven by higher goods imports, reduced donations and a drop in exports and air transport services,” the annual report from the Bank of Cape Verde said.

The country’s capital surplus was reduced sharply after conclusion of the projects funded by the first compact of the Millennium Challenge Account, foreign direct investment (FDI) dropped by 21.6 percent and consequently the country’s net foreign reserves fell by 33 million euros, and now cover 3.2 months of imports. (macauhub)