Banco de Cabo Verde
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Monetary Policy Report

2/19/2019

Monetary Policy Report 2018

The overall benign performance of the external environment favored the remarkable dynamics of the national economy, which grew by 4.7 percent year-over-year in the first half-year.

 

The economy also benefited from the contained growth of inflationary pressures, as well as stronger confidence of economic agents, which favored demand and the (internal) conditions for financing the economy. The benign performance of some fields of activity and exports contributed to ease the current account and, consequently, to improve the external accounts.  

 

Banco de Cabo Verde expects a 4.5 percent economic growth and a 1.3 percent average annual inflation for the year’s end. Based on the expected benign developments in the external environment and the absence of infrastructural and commercial constraints on domestic production and the external financing of investments in the country, the baseline scenario for the central bank's projections for 2019 suggests a slight increase in the growth rate of the economy and inflation, compared to 2018.

 

The recent dynamics of the economy is an opportunity to strengthen the country’s productive capacity, through the implementation of policy measures (also of a microeconomic nature), reduce its vulnerability to external shocks, and reduce the country risk premium, which increases the cost of investments financed with external capital.

 

2/19/2019

The overall benign performance of the external environment favored the remarkable dynamics of the national economy, which grew by 4.7 percent year-over-year in the first half-year.

 

The economy also benefited from the contained growth of inflationary pressures, as well as stronger confidence of economic agents, which favored demand and the (internal) conditions for financing the economy. The benign performance of some fields of activity and exports contributed to ease the current account and, consequently, to improve the external accounts.  

 

Banco de Cabo Verde expects a 4.5 percent economic growth and a 1.3 percent average annual inflation for the year’s end. Based on the expected benign developments in the external environment and the absence of infrastructural and commercial constraints on domestic production and the external financing of investments in the country, the baseline scenario for the central bank's projections for 2019 suggests a slight increase in the growth rate of the economy and inflation, compared to 2018.

 

The recent dynamics of the economy is an opportunity to strengthen the country’s productive capacity, through the implementation of policy measures (also of a microeconomic nature), reduce its vulnerability to external shocks, and reduce the country risk premium, which increases the cost of investments financed with external capital.

 


4/19/2018

Statistics and trend indicators suggest that the economic dynamics will continue to recover in the first half year, anchored in an external context more favorable to growth in tourist demand and direct investment in the country and in an environment of continuous improvement in the economic climate and increased credit supply.

 

The favorable performance of the national economy in the first half of the year, better prospects regarding the external environment and the macroeconomic policy stance support the close to four percent economic growth for both 2017 and 2018.

 

The monetary policy stance is expected to continue to stimulate domestic demand, provided there are no significant pressures on external reserves and inflation. However, at the structural level, in order to expand aggregate supply and growth potential, the country faces the challenge of adequately implementing reforms that induce the increase in total factor productivity.

 


12/20/2016

Cabo Verde's monetary policy aims at price stability as a necessary condition for ensuring the country’s macro-financial stability. In strategic terms, however, it seeks to protect the exchange rate regime’s credibility, by maintaining a level of net international reserves sufficient to ensure, above all, the short-term coverage of contractual and contingent liabilities and address a possible temporary shortage of capital. Over the last three years, in an environment of no significant pressures on the balance of payments and consumer prices, but low economic growth, monetary policy was accommodative. Nevertheless, cyclical constraints (related to the high level of bad loans) and structural constraints (due to limited financial sector development) condition monetary transmission, which has been taking place more noticeably since late 2015, with the gradual recovery of credit to the private sector.


3/21/2016

In a context of moderate recovery in the country’s main economic partners and assuming the maintenance of the current guidelines for macroeconomic policy, the baseline scenario for the current projection suggests an economic growth between one and two percent in 2015 and a more dynamic economy in 2016.

 


6/3/2014


5/15/2012

11/8/2011

10/25/2010

5/1/2010