Cabo Verde’s public accounts posted a deficit of 523 million escudos (4.7 million euros) until February, according to budget execution data.
According to the document from the Ministry of Finance, this performance — which follows the historic surplus in January, of 159 million escudos (1.4 million euros) — was influenced by the 29.2% increase in total revenues, compared to the same period of 2022, although expenses also rose, in this case by 12.1%.
The deficit registered in the first two months of the year, equivalent to 0.2% of the Gross Domestic Product (GDP) expected for this year, compares with a negative balance of 1,525 million escudos (13.7 million euros) in the same period of 2022, then equivalent to 0.7% of the estimated GDP.
Cape Verde’s public accounts recorded a deficit of 9,677 million escudos (88 million euros) at the end of 2022, equivalent to 4.2% of estimated GDP, below the government’s expectations, according to official data previously reported.
According to the provisional report of the State accounts from January to December, from the Ministry of Finance, it was still conditioned by the economic consequences of the covid-19 pandemic, but with central government revenues up 17.5% compared to 2021, as well as total expenditures, in this case by 6.6%.
The deficit equivalent to 4.2% of GDP from January to December last year compares with a negative balance of over 14,371 million escudos (130.6 million euros) at the end of 2021, then equivalent to an estimated 7.3% of GDP.
“The improvement in the balances, compared to the same period in 2021, stems from the increase in revenues by more than 7,892.6 million escudos [71.7 million euros], compared to the revenue collected in 2021, essentially justified by the recovery of economic activity and the increase in prices, as well as the reprogramming of the expenditure side in response to the impact of the crisis caused by the war in Ukraine and some effect of the exchange rate variation”, the document said.
Cabo Verde is recovering from a deep economic and financial crisis, due to the sharp drop in tourism demand — a sector that accounts for 25% of the archipelago’s GDP — since March 2020.
With some recovery in tourism demand, the country grew 7% in 2021, according to data from the National Institute of Statistics. However, due to the economic consequences of the war in Ukraine, the Cape Verdean government has revised the economic growth outlook for 2022 from 6% to 4%. However, in late October, it revised this forecast again, to at least 8% growth and in December to more than 10%.