Africa-Press – Cape verde. The Bank of Cape Verde revised the country’s economic growth forecast for this year up by 0.4 percentage points, placing it at 4.5%, mainly due to the slowdown in inflation, the governor announced today in Praia.
There was an “upward revision” in relation to the April forecast, “due to more recent data”, namely “a much greater than expected slowdown in prices”, boosting consumption, explained Óscar Santos at a press conference.
The central bank also forecasts growth of 4.7% in 2024 and 5.4% in 2025, based on “the improvement in real household incomes, supported by the decline in inflation” and a predictable “increase in external tourist demand, in line with the improvement of the economic prospects of the main partners”.
Inflation is expected to settle at 4% this year, 2.2% in 2024 and 1% in 2025, a forecast made in anticipation of a “fall in raw material prices, normalization of supply chains and reduction of pressure on costs of production”.
The Bank of Cape Verde (BCV) estimates that the current account deficit in 2024 will be set at 2% of Gross Domestic Product (GDP), slightly lower than estimated for 2023, with Net International Reserves (RIL) covering 5, 6 months of imports – above the comfort line of three months, stressed the governor.
Credit to the economy is expected to grow 3%, “a slight slowdown compared to what is expected for 2023”, he added.
Óscar Santos indicated some external factors as points of uncertainty.
“There are always risks, on the negative side, which are related to geopolitical tension”, such as a “possible escalation of the conflict between Hamas and Israel, which could have negative effects on energy and food prices”, he said.
Such a scenario, in turn, “could lead to a reversal of financial conditions by banks”, he added.
A less successful economic performance on the part of China, the world’s second largest economy, could be another risk, he indicated. The Week with Lusa
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