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24/04/05 - IMF Reports on Cape Verde's Strong Growth PDF Print E-mail
The IMF visited the Cape Verde islands (Praia) in March and have reported on the strong growth being experienced on the islands.  All signs looking good for the Cape Verde islands growth propects over the next few years.........

Cape Verde has been re-classified as a middle-income country due to the strong economic growth being experienced by the islands . The strong growth is being driven by mainly foreign investments in the tourism sector.

According to the latest assessment of the Cape Verdean economy by the International Monetary Fund (IMF), the country's economic and policy performance "continues to be sound." An IMF mission, which visited Praia in March 2005, concluded that Cape Verde could expect stronger economic growth this year.

Cape Verde's real GDP grew by 4.5 percent last year, according to the latest estimations by the IMF and authorities in Praia. According to the IMF, economic growth was "projected to pick up to around 6 percent in 2005, with inflation remaining low."

The IMF mission was also optimistic on Cape Verde's continued economic performance. The medium-term economic growth outlook was set at 6 to 7 percent by the government - a calculation supported by the IMF. Economic performance in 2004 and 2005 has so far been in line with the Praia government's medium-term plans, launched in April 2002.  

According to the IMF, this favourable outlook "is supported by strong public and private investment, directed largely toward infrastructure development and the tourism sector, and backed by higher external support." The tourism sector some years ago was declared the industry with a largest growth potential in Cape Verde, a sunny and naturally beautiful island state.

During the last decade, Cape Verde has also enjoyed an increasingly positive image among foreign investors, given its stable economic and political climate. Cape Verde's "high standards of governance," which were also praised by the IMF mission, further has increased investors' confidence.

The strong economic performance over years has led to the new classification of Cape Verde as middle-income country by UN standards. This in turn will give the archipelago less possibilities regarding classical development aid from donor countries and financial institutions such as the IMF and the World Bank. The Cape Verdean government therefore currently is asking donor countries and institutions for a smooth transition.

This new classification was discussed in parliament in Praia earlier this week. Prime Minister José aria Neves emphasised that the middle-income status also was a resource to the nation, being "proof of the external credibility achieved by Cape Verde." Mr Neves added that further foreign investments would be easier to achieve given "the prestige that the country now enjoys."

Content Courtesy of AFROL NEWS
 
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