Macroeconomic Performance
Table 1: Overview of some macroeconomic indicators
Economic growth in Cabo Verde eased to 4.8 per cent in 2023, down from 17.1 per cent in 2022. Average inflation decelerated to 3.1 per cent in 2023, down from 7.9 per cent in 2022, while fiscal balance eased to -0.3 per cent from -4.3 per cent in 2022. Public debt declined markedly to 115.4 per cent of GDP in 2023 from 127.5 per cent of GDP in 2022, while the current account balance worsened to -5.3 per cent of GDP in 2023 from -3.4 per cent of GDP in 2022.
Outlook
GDP growth in Cabo Verde is projected to stabilise at 4.8 per cent in 2024, increasing to 5.1 per cent in 2025 as the tourism sector consolidates at pre-pandemic levels. Average inflation is projected at 2.0 per cent in 2024, decelerating further to 1.9 per cent in 2025 on the back of expected disinflation in food prices. Fiscal balance is projected to accelerate to -3.2 per cent of GDP in 2024, easing to -2.1 per cent of GDP in 2025. The debt-to-GDP ratio is projected to continue on a declining trend to 112.2 per cent in 2024 and further to 108.0 per cent in 2025. The current account balance is projected to widen to -8.4 per cent of GDP in 2024 and stabilising around that rate in 2025.
Probable Headwinds
The Cabo Verdean economy is heavily reliant on tourism. Unforeseen challenges in tourist feeder countries could adversely impact the growth in tourism value addition. Climate change has resulted in the underperformance of the agriculture sector in the recent past.