Cabo Verde: Fifth Review Under the Extended Credit Facility Arrangement, Request for a Waiver of Nonobservance of Quantitative Performance Criterion, Modification of Quantitative Performance Criteria, and Second Review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Cabo Verde

This paper presents Cabo Verde’s Fifth Reviews under the Extended Credit Facility (ECF) Arrangement, Request for a Waiver of Nonobservance of Quantitative Performance Criterion (QPC), Modification of Quantitative Performance Criteria, and Second Review under the Resilience and Sustainability Facility (RSF) Arrangement. The ECF-supported program aims to strengthen public finances and put debt on a downward path, reduce fiscal risks from public enterprises, modernize the monetary policy framework, and raise growth potential. Cabo Verde continues to grow strongly, reflecting a rebound in tourism, robust export performance, as well as private consumption growth. Cabo Verde’s near-term economic outlook remains favorable. Growth is projected to gradually converge to its potential rate of about 4.8 percent by 2029. The RSF supports government efforts to implement macro-critical climate reforms and catalyze private climate finance. All ECF performance criteria were met except the gross international reserves (GIR) QPC, although the Bank of Cabo Verde has taken corrective actions to address the missed target. All indicative targets, except for GIR, and structural benchmarks through September 2024 were met. One RSF reform measure was completed, with three delayed to the next review.