Cabo Verde: First Review Under the Extended Credit Facility Arrangement-Press Release; and Staff Report

This paper presents Cabo Verde’s First Review under the Extended Credit Facility (ECF) Arrangement. The strong and broad-based recovery of the Cabo Verde economy continued in 2022. The economy has now recorded five consecutive quarters of positive growth, supported by a rebound in the tourism sector. This helped improve the fiscal position and place the debt-to-gross domestic product ratio on a downward path. International reserves are adequate, and the financial sector remains resilient. It is important to continue efforts to preserve fiscal and debt sustainability and accelerate economic reforms while aiding the vulnerable and supporting the economic recovery. The authorities are focused on preserving fiscal and debt sustainability, providing support to the vulnerable and supporting the economic recovery. Over the medium term, fiscal consolidation would be supported by advances in revenue mobilization particularly through the digitalization of services and reforms to reduce risk from state-owned-enterprises. Monetary and financial policy remains focused on protecting the peg and safeguarding financial sector stability.