World Bank Analyzes Cabo Verde Economic Update 2024: Focus on Resilience and Blue Economy Development

Rosa Brito, World Bank Economist and lead author of the report, emphasizes the importance of sustainable development in the blue economy for Cabo Verde.

Cabo Verde has demonstrated resilience in its post-COVID-19 recovery, but vulnerabilities such as reliance on tourism and underperforming State-Owned Enterprises (SOEs) have been exposed, exacerbated by the impacts of climate change.

In the Cabo Verde Economic Update 2024, the World Bank examines the country's economic state in 2023, projects scenarios for 2024, and proposes policy options to accelerate fiscal consolidation, reduce debt vulnerabilities, and promote sustainable growth in the blue economy, thereby enhancing resilience to climate and economic shocks.

Key highlights from the report include:

Economic Growth: In 2023, economic growth slowed to 5.1%, with tourism returning to pre-pandemic levels. Despite this, poverty remains higher than pre-pandemic levels. Inflation decreased to 3.7% due to lower fuel and food prices.

Fiscal Position: The fiscal deficit improved to -0.3% of GDP in 2023, driven by increased tax revenues. However, persistent concerns revolve around fiscal risks associated with SOE performance.

Outlook: Real GDP growth is forecasted to remain stable at 4.7% in 2024, but significant risks loom, including potential increases in commodity prices, weaker external demand in tourism markets, and limited progress on SOE reform. Climate change also poses a threat due to the country's high vulnerability.

Blue Economy Development: Cabo Verde, as a Small Island Developing State, sees the blue economy as a crucial avenue for economic diversification and resilience building. Prioritizing responsible management of marine resources, improvements in fisheries governance and infrastructure, and investment in aquaculture are highlighted as essential steps in this direction.

Rosa Brito, World Bank Economist and lead author of the report emphasizes the importance of sustainable development in the blue economy for Cabo Verde. This entails responsible resource management, enhanced data collection and statistical capacity, and integrated policies promoting maritime transportation and renewable energies. Cabo Verde's commitment to leveraging these opportunities for sustainable economic growth while safeguarding the environment is emphasized.

The Cabo Verde Economic Update 2024 underscores the imperative of addressing vulnerabilities and seizing opportunities for inclusive and sustainable development in the face of ongoing challenges posed by climate change and economic volatility.