Cabo Verde’s state budget for 2016 has deficit of 5.2% of GDP

14 July 2016

Cabo Verde’s (Cape Verde’s) budget deficit this year is expected to be 5.2% of GDP, an increase of 1.5 percentage points compared to a previous forecast, the Minister of Finance said in parliament.

Minister Olavo Correia, presenting the draft State Budget law for 2016 on Wednesday, which will be applied only in the last five months of the year, said that this is a budget with a tax margin of “almost zero.”

“It will still have to guarantee various commitments made between the end of 2015 and the first quarter of 2016 as well as an investment programme negotiated by the previous government,” he said.

The proposed state budget includes expenditure of about 60 billion escudos (US$600 million), of which 40.1 billion escudos are earmarked for the functioning of the state and 19.5 billion escudos will be reserved for investments.

International partners will provide Cabo Verde with direct support to the budget in the amount of 6.332 billion escudos (about US$63 million).

The budget forecasts estimate economic growth of between 3.5% and 4.5% of GDP, based on the increase in foreign direct investment, productivity and confidence of economic agents. (macauhub/CV)