The International Monetary Fund has praised Cape Verde for its economic performance, but at the same time the international financial institution advises prudence on the part of authorities. In a communiqué issued Friday, the IMF highlighted the improvement in economic indicators between 2000 and 2005, but alerted to the Cape Verdean economy’s “vulnerability” to “external shocks.”

In an analysis published on the IMF’s web site, the institution’s directors hail Cape Verde’s “strong economic performance in recent years,” visible in the “robust” growth in real GDP, “consistently low inflation” and the “relatively small foreign debt.” This, says the IMF, is the result of macroeconomic policies that over the past several years have allowed the country to “correct the severe macroeconomic imbalances that emerged in 2000 in the run-up to parliamentary and presidential elections.”

While praising the performance of the Cape Verdean economy, the IMF also warns of the dangers of the country’s “heavy dependence on external concessional financing.” This situation, says the Fund, leaves Cape Verde “vulnerable to external shocks.”

The financial institution advises Cape Verdean authorities to maintain “prudent” macroeconomic policies, particularly during the period preceding next year’s elections.