The inflation rate in Cape Verde this year is forecast to be 4.9 percent and in 2008 it is projected to be between 2 and 4 percent, the governor of the central bank said in Praia Tuesday.

Carlos Burgo, who was speaking to journalists after handing the bank’s report for the March to October period to the government, noted that the bank’s current projection for inflation was higher than that of the Finance ministry and also that of the bank's March report.

The Bank of cape Verde (BCV) forecast an inflation rate for this year of 2.5 to 3.5 percent, but due to various factors the figure has now been set at 4.9 percent.

The governor explained the new forecast through price increases on imported goods, particularly oil products, along with to a late farming year which had led to higher prices of food items.

The governor of the central bank recommended moderation in salary increases for 2008, against the backdrop of a 5 percent inflation rate.

For 2008, the BCV’s estimates point to growth in economic activity of 6.5 to 7.5 percent against 6.4 percent this year.

Also according to the document handed into the government, Cape Verde’s foreign debt at the end of the year is expected to total US$720 million, with 84 percent of the total being the State’s responsibility and the remainder that of the private sector.

Source: Macauhub