Cape Verde’s finance minister says IMF made a miscalculation

15 April 2013

The International Monetary Fund (IMF) has recognised it made a mistake when writing up a report in November 2012 noting that Cape Verde’s public debt totals 97 percent of its gross domestic product (GDP), Cape Verde’s Finance Minister said Sunday.

Reacting to a downgrade (from “BB-” to “B+”) in Cape Verde’s credit rating by Fitch Ratings, announced last week Cristina Duarte said that the IMF had recognised that the archipelago’s debt to GDP ratio in 2012 was actually around 83 percent rather than 97 percent.

“We alerted the IMF to that fact that their figures for the debt to GDP ratio were incorrect and on Friday we received an email from the IMF in which it recognises that error,” said the minister, re-stating that public debt in 2012 was 83 percent of GDP.

Duarte gave assurances that the Finance Ministry had ensured that the IMF would correct its information during its next mission to Cape Verde.

In relation to Fitch’s rating the minister said that the drop in credit rating was related to the fact that the country’s debt strategy was mainly based on loans in foreign currency.

The minister said that the risk had not changed although Fitch Ratings’ outlook had been changed from “stable” to “negative2, which was enough for the quality of the archipelago’s debt to be considered “highly speculative.” (macauhub)