The Cabo Verdean authorities have consented to the publication of the accompanying IMF Staff Report.
Under the IMF programmes, access under the ECF totals 220% of quota $ 71.28 million, while access under the RSF totals 100% of quota, $ 32.39 million. With the completion of the seventh ECF review, Cabo Verde is now eligible for a disbursement of $3.25 million. The completion of the third RSF review also enables a disbursement of up to $ 7.23 million.
Cabo Verde’s economy continues to perform strongly, supported by tourism, robust export activity, and private consumption growth. The IMF estimates economic growth at 5.2% in 2025, following 7.2% in 2024. Inflation has remained steady around the 2% target, after averaging 1.0% in 2024.
External accounts have also improved. The current account recorded a surplus in 2024 and is expected to post another surplus in 2025, helped by resilient tourism receipts, strong remittances, and weaker imports of capital goods. International reserves rose to €1.06 billion in December 2025, remaining comfortably above the programme benchmark of 5.5 months of import cover.
Monetary policy, the IMF said, remains appropriately flexible to protect price stability and preserve external buffers. The financial system is described as liquid, profitable, and well-capitalised, while fiscal outcomes in 2025 stayed strong, boosted by revenue momentum and tight control of current expenditure, although the execution of capital spending remained low. Public debt, meanwhile, continues to decline as a share of GDP.
Performance under the ECF arrangement remains solid. The IMF reported that all end‑June 2025 quantitative performance criteria, as well as continuous criteria and indicative targets, were met, with the exception of the September 2025 indicative target on social spending.
While no structural benchmarks fell due during this review period, reforms are progressing. Notably, Cabo Verde has passed amendments to the Banco de Cabo Verde Organic Law, described by the IMF as an important governance reform. Under the RSF review, two of the three reform measures were completed.
The IMF assessed Cabo Verde’s near‑term outlook as favourable, though vulnerable to external and fiscal shocks. Growth is expected to converge towards potential levels over the medium term, with inflation remaining around 2%.
On the fiscal front, the primary surplus is projected at 1.3% of GDP in 2026, stabilising at around 1.2% of GDP over the medium term. This trajectory is expected to be supported by tax reforms aimed at reducing tax expenditures, alongside rationalisation of current spending.
The current account surplus projected for 2025 is expected to shift into a moderate deficit over 2026–2030, reflecting higher climate‑related spending and stronger imports linked to robust domestic demand. The IMF flagged downside risks including a global growth slowdown, trade tensions, financing pressures, and climate shocks.
State‑owned enterprises (SOEs) remain a significant vulnerability. The IMF cautioned that delays in reform and rising SOE debt could undermine fiscal stability, while the overall debt level still represents a source of risk. The Fund stressed the importance of concessional financing to limit debt‑servicing costs. On the upside, stronger‑than‑expected tourism growth could lift economic activity further.
Following the Executive Board discussion, IMF Deputy Managing Director and Acting Chair Mr Li welcomed Cabo Verde’s strong economic performance in 2025, citing prudent macroeconomic management and sustained reform progress. However, he noted that risks remain from external shocks, SOE‑related fiscal pressures, and the electoral cycle.
–IMF/ChannelAfrica–
