Standard & Poor’s keeps Cabo Verde’s credit rating unchanged at “B”

18 June 2014

Credit rating agency Standard & Poor’s has kept its rating on Cabo Verde (Cape Verde) unchanged at “B” with a “stable” outlook, the agency said adding that it expected the archipelago’s economic growth to accelerate in the 2014/2017 period.

The projection of greater economic growth is the result of improved performance of sectors such as agriculture and fishing, as well as a gradual recovery of the Euro Zone economy.

Tourism revenues on the islands of Sal and Boavista are expected to continue to grow and the government’s focus on building infrastructure and modernising the country’s two main airports, which will increase passenger traffic, as well as public investment in water and energy are expected to bolster the economic outlook, alongside improved domestic demand.

Standard & Poor’s also expects the government to consolidate and conclude public sector projects and that, despite a rise in tax revenues in 2013, the fiscal deficit will likely gradually contract in 2013 to an average of 6.2 percent of GDP in the 2014-1017 period.

The report also noted that Cabo Verde’s accumulated debt since 2009 is directly related to high spending on public infrastructure projects, and in net terms this should reach a peak of 100 percent of GDP in 2016, and from then on it would be gradually reduced. (macauhub/CV)