Negative outlook for Cape Verde’s credit rating

6 November 2013

The Fitch Ratings agency has rated Cape Verde’s long term debt at B+ with negative outlook and its short term debt at B, the credit rating agency has announced in a statement released in London.

One reason for Cape Verde’s rating is that revised national accounts figures up to 2011 show that gross domestic product growth rates were overestimated.

Fitch Ratings indicated that as a result of that update the average real GDP growth rate for the five-year period ending in 2012 fell from the previous 5.1 percent to 2.8 percent.

Another reason stems from the fact that Fitch Ratings’ forecast for GDP growth this year is lower than that announced by the Cape Verdean government, whereby government debt could reach 94.6 percent of GDP this year and grow even more in 2014.

The agency speaks of the “increase” of the public deficit, the “continuing lack of clarity” on macroeconomic performance and infrastructure investment that is unable to support medium term growth. (macauhub)