Forecasts from the Bank of Cape Verde align with those of other international financial and development institutions, indicating positive economic growth driven by tourism and domestic consumption.
According to a statement from the Bank of Cape Verde, “the national economy is expected to continue growing, primarily supported by external tourist demand and private consumption, as indicated by the monitored quantitative indicators.”
Inflation decreased to 1.6% year-on-year in July, down by 0.2 percentage points from the previous month. The central bank’s board of directors recently decided to maintain the reference interest rates, citing a “downward trend in inflation” and anticipated “interest rate cuts by major central banks,” according to the Bank of Cape Verde.
Cape Verde’s economy grew by 5.1% in 2023, driven largely by the tourism sector. The African Development Bank had forecasted this growth, predicting a 5.2% increase in 2024 and a 5.4% rise in 2025, fueled by advancements in agriculture, energy, the digital economy, and private consumption. The Bank’s report highlights the importance of investing in skills, technological innovation, and modernizing ports and airports to leverage opportunities within the African Continental Free Trade Area. Despite positive social indicators, poverty and unemployment remain challenges, exacerbated by the impacts of Covid-19.
In June, the World Bank projected a stable real GDP growth rate of around 4.7% for 2024, supported by structural reforms and a continued decline in inflation. However, the report also noted significant risks, including potential commodity price increases, weak external demand in the tourism sector, and limited progress in sectoral budget support reforms.
In 2023, the IMF, acknowledging Cape Verde’s recovery from a severe economic and financial crisis caused by decreased tourism demand due to the pandemic, highlighted that Cape Verde remains “highly vulnerable” to the impacts of climate change.