Cabo Verde economy expected to grow between 2 pct and 3 pct in 2015

11 December 2014

The Cabo Verde (Cape Verde) economy is expected to grow between 1 percent and 2 percent this year and between 2 percent and 3 percent in 2015, according to the Monetary Policy Report of the Bank of Cabo Verde.

The report begins by saying that domestic demand increased in the last six months, supported by external public and private business investment, which offset government spending and weaknesses of the domestic private sector.

It also states that improvement of the external economic climate boosted demand for domestically produced tradable goods, along with remittances and the recovery of foreign direct investment (FDI).

The country’s foreign reserves remained at a comfortable level for sustainability of the exchange rate regime in force and for macroeconomic and financial stability.

This, together with low inflation, allowed the Bank of Cabo Verde to boost measures to stimulate the economy, not only by reducing its interest rates, but also by adopting liquidity management measures to enhance the monetary policy transmission mechanism.

These forecasts are conditioned by stagnation of the euro area economy, continuing deterioration of the confidence of domestic economic agents and a possible deterioration of public accounts, along with the spread of the Ebola virus in the region, which may have effects on tourism demand. (macauhub/CV)