Cape Verde’s prime minister calls for increase in debt ceiling to 90 pct of GDP

26 October 2012

Cape Verde’s Prime Minister admitted that the country’s public debt levels, as outlined in the 2013 state budget, were likely to reach 90 percent of gross domestic product (GDP) but argued that an increase of almost 10 percentage points was economically sustainable.

Cited by Portuguese news agency Lusa, José Maria Neves said that increasing debt from 80.1 percent to 90 percent of GDP as outlined in the state budget for next year was due to taking on subsidised loans with long repayment periods.

According to the proposed 2013 state budget, which will be under discussion in parliament in November, the government expects foreign debt to increase from 60 to 70 percent, whilst domestic debt will remain steady at around 20 percent, making up 90 percent of Cape Verde’s GDP.

Neves also said that the State Budget for 2013 showed that the budget deficit would fall from 9.8 percent to 7.2 percent, and would mainly be funded by foreign resources, as well as subsidised loans. The economy, he said, is expected to post growth of 5 percent in 2013 and inflation to total around 2.5 percent.

The State Budget proposal outlines expenditure of 60.4 billion Cape Verdean escudos (US$711 million) and revenues of 47.3 billion Cape Verdean escudos (US$613 million). (macauhub)