- IMF staff held discussions under the 2025 Article IV Consultation and reached a staff-level agreement with the Cabo Verdean authorities on the seventh ECF review and third and fourth RSF reviews.
- The ECF-supported program aims to strengthen public finances, ensure debt sustainability, minimize fiscal risks from public enterprises, modernize monetary policy, and raise potential growth. The RSF supports government climate reforms and catalyzes private climate finance.
- All end-June 2025 ECF quantitative performance criteria (PCs) and continuous PCs were met. No Structural Benchmarks (SBs) were due for this review. The Reform Measures (RMs) under the RSF are progressing and three RMs for this review are expected to be completed, pending final documentation.
Praia, Cabo Verde: An International Monetary Fund (IMF) team led by Mr. Martin Schindler visited Cabo Verde during October 22 – November 4, 2025, to hold discussions under the 2025 Article IV Consultation, the seventh review under the Extended Credit Facility (ECF) arrangement, and the third and fourth reviews under the Resilience and Sustainability Facility (RSF) arrangement. Access under the existing ECF is 220 percent of quota (SDR 52.14 million, approximately US$ 70.98 million) and access under the RSF is 100 percent of quota (SDR 23.69 million, approximately US$ 32.25 million).
At the conclusion of the mission, Mr. Schindler issued the following statement:
"I am pleased to announce that the IMF team and the Cabo Verdean authorities have held productive discussions under the 2025 Article IV consultation and reached staff-level agreements on the seventh review under the Extended Credit Facility (ECF) arrangement, and third and fourth reviews under the Resilience and Sustainability Facility (RSF) arrangement. Upon approval by the IMF's Executive Board, completion of the seventh ECF review will allow disbursement of SDR 2.37 million (approximately US$ 3.23 million), while the completion of the third and fourth RSF reviews will allow disbursement of up to SDR 7.896 million (approximately US$ 10.75 million), depending on reform progress under the RSF.
"Cabo Verde's robust 2024 economic growth momentum has continued into 2025, underpinned by tourism, robust export performance and private consumption growth. Economic growth in 2024 was strong at 7.3 percent, with 1.0 percent inflation and a current account surplus. The 2024 fiscal primary balance exceeded program targets, driven by lower primary expenditures and strong tax revenue growth. The public debt-to-GDP ratio continues to decline.
"All end-June 2025 ECF quantitative performance criteria (PCs) and continuous PCs as well as indicative targets (IT) were met. No Structural Benchmarks (SBs) were due for this review. Reforms under the RSF are progressing and three Reform Measures (RMs) due for this review are expected to be completed, pending final documentation.
"Cabo Verde's economic outlook remains solid. The economy continued to grow robustly in 2025Q2 by 6.2 percent year-on-year, reflecting strong tourism growth, with air passenger arrivals surpassing levels recorded in previous years, and with net exports and private consumption more than offseting a drag from investment. GDP growth in 2025 is projected at 5.2 percent, while inflation is expected to converge to 2 percent in 2025 and over the medium-term, broadly in line with euro area inflation. Early data indicate that the 2024 momentum in the current account has continued into 2025. The current account posted a surplus of 5.4 percent of GDP for 2025H1, driven by the combination of strong growth in tourism revenues, robust remittances, and a smaller deficit in the primary income. The current account balance is projected to gradually return to deficits as capital expenditures on climate and infrastructure increase. Gross international reserves reached €942 million at end-September 2025, comfortably above the target of 5.5 months.
"Fiscal performance is projected to be strong in 2025 driven by strong revenue momentum and tight control of current spending, while capital spending execution remains low.
"The BCV's Monetary Policy Committee (MPC), in its latest meeting, kept policy rates unchanged and is committed to closely monitoring capital flows to safeguard the peg, while paying close attention to inflation dynamics. The BCV is prepared to adjust policy settings when necessary to preserve price stability and the credibility of the exchange rate regime. Data for end-June 2025 suggest that the financial system is liquid, profitable, and well capitalized.
"The macroeconomic outlook remains favorable but is subject to substantial downside risks. Cabo Verde is highly vulnerable to external shocks in energy, food, tourism, and global trade frameworks, compounded by climate threats, such as extreme weather events. Fiscal sustainability could also be undermined by delays in SOE reforms and rising public debt, while upcoming elections may add fiscal pressures; however, the authorities have a strong track record in terms of commitment to the programs' objectives. On the upside, continued strength in tourist arrivals could lift growth.
"IMF Staff met with Prime Minister Ulisses Correia e Silva, Vice Prime Minister and Minister of Finance Olavo Correia, Central Bank Governor Oscar Santos, other government and central bank officials, representatives of the private sector, and development partners. The IMF team would like to express their gratitude to the Cabo Verdean authorities and other stakeholders for the productive discussions and warm hospitality."
