Cabo Verde’s public debt reaches 131% of GDP in 2016

23 June 2017

Cabo Verde’s (Cape Verde’s) public debt reached 211.5 billion escudos (US$2.134 billion) at the end of 2016, according to a report by the Bank of Cabo Verde, which it said was the equivalent of 131% of gross domestic product (GDP).

The 2016 Financial Stability Report, now available on the institution’s website, forecasts that public debt will increase by 6.0% this year as budget execution has resulted in a deficit of 5.797 billion escudos.

The budget deficit narrowed by 0.3 percentage points to 3.6 percent of GDP in 2016, due to an increase in budget revenues of about 3.0 percent, the Cape Verdean central bank said, adding that this increase was the result of tax reforms implemented since 2013 as well as the evolution of economic activity.

However, operating expenses increased by around 8.0%, which was partially offset by the drop in expenditure on the acquisition of non-financial assets by 29%.

This year, the Bank of Cabo Verde, which said the forecasts were drawn up in an uncertain climate, expects an economic growth rate lower than the one registered in 2016 – 3.9% – which should be in the range of 3.0 % and 4.0%.

The BCV forecasts anticipate improvements in the labour market related to the “increase in private investment and gross fixed capital formation, supported by external investment projects.”

The Cape Verdean central bank predicts that, similarly to 2016, public investment this year will continue on a downward trend. (macauhub)