## IMF Executive Board Completes Fourth Review of the Arrangement Under the Extended Credit Facility and First Review of the Arrangement Under the Resilience and Sustainability Facility for Cabo Verde

_IMF News, June 25, 2024_

## Source details

**Canonical URL:** [IMF Executive Board Completes Fourth Review of the Arrangement Under the Extended Credit Facility and First Review of the Arrangement Under the Resilience and Sustainability Facility for Cabo Verde](https://www.imf.org/en/news/articles/2024/06/25/pr24238-cabo-verde-imf-exec-board-completes-4th-rev-arr-ecf-1st-rev-arr-rsf)

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## Bibliographic details
- Published: June 25, 2024

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### Executive Board decisions and financing
- Completed the fourth review of the 36-month Extended Credit Facility (ECF) arrangement approved on June 15, 2022.
- Completion of the ECF review allows authorities to draw the equivalent of SDR 4.5 million (about US$5.94 million).
- Total disbursement under the ECF after this review: SDR 36.02 million (152 percent of quota or about US$ 48.17 million).
- Completed the first review under the 18-month Resilience and Sustainability Facility (RSF) arrangement approved on December 11, 2023.
- Completion of the RSF review allows authorities to draw the equivalent of SDR 5.264 million (22.22 percent of quota or about US$6.94 million).
- Executive Board decision was taken on a lapse-of-time basis.
- Approved authorities’ request for modification of the end-June and end-December 2024 performance criteria under the ECF arrangement.
- Approved authorities’ request to rephase the availability dates under the RSF arrangement.

### Macroeconomic performance (2023) and near-term outlook
- Real GDP growth in 2023: 5.1 percent.
- Public debt-to-GDP ratio: continuing on a downward path (reflecting high growth and a record 2023 primary fiscal surplus).
- Inflation in 2023: low (textual description).
- International reserves: maintained at a prudent level to protect the peg.
- Financial sector: remains resilient; data for end-December 2023 suggests the financial system is liquid, profitable, and well capitalized.
- Near-term growth projection: real GDP growth of 4.7 percent in 2024 as export growth (especially services) normalizes following the return to the pre-pandemic levels of visitor arrivals.
- Medium-term projection: economy projected to converge to potential growth of 4.5 percent by 2028.
- Inflation forecast: 2 percent in 2024 and over the medium-term, broadly in line with Euro area inflation.
- Overall near-term outlook: favorable but moderated from recent highs; some downside risks remain.

### Program performance and conditionality
- All quantitative performance criteria (QPCs) for end-December 2023: met.
- Non-quantitative continuous performance criteria (PCs): met.
- Indicative targets (ITs) for end-September 2023: met.
- Indicative target on social spending for end-December 2023: missed because of weaker-than-expected spending growth in health and education programs and delays in external grants.
- Structural Benchmarks (SB) for end-December 2023: met.
- Reform Measures (RMs) for the first review under the RSF arrangement: completed on time.

### Reform priorities and policy stance
- Monetary policy: current monetary tightening appropriate to narrow the differential with the ECB policy rate—an important measure to protect the peg.
- Monetary and financial policy frameworks: authorities are improving these frameworks.
- RSF-supported reforms: focus on the energy-water nexus to facilitate private sector development, build appropriate infrastructure, reduce costs, and manage the energy transition.
- Social policy: targeted social policies and spending geared towards poverty reduction and compensating the most vulnerable for the costs of transition.
- State-owned enterprise (SOE) reforms: key to improve financial performance and reduce fiscal risks.
- Competitiveness-enhancing measures: improving inter-island connectivity is critical for competitiveness.
- Overall reform objective: foster productivity, diversification, and climate resilience.

### Key statistics (as reported)
- ECF draw this review: SDR 4.5 million (about US$5.94 million).
- ECF total disbursement: SDR 36.02 million (152 percent of quota or about US$ 48.17 million).
- RSF draw this review: SDR 5.264 million (about US$6.94 million).
- ECF arrangement length: 36-months.
- RSF arrangement length: 18-months.
- ECF approval date: June 15, 2022.
- RSF approval date: December 11, 2023.
- Real GDP growth 2023: 5.1 percent.
- Real GDP growth projection 2024: 4.7 percent.
- Potential growth by 2028: 4.5 percent.
- Inflation forecast 2024 and medium-term: 2 percent.
- Executive Board action: lapse-of-time procedure invoked.

*Press Release No. 24/238, June 25, 2024.*

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## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Cabo Verde and the IMF](http://www.imf.org/external/country/CPV/index.htm)
- [IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries)
- [IMF Quotas -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/imf-quotas)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2024/06/25/pr24238-cabo-verde-imf-exec-board-completes-4th-rev-arr-ecf-1st-rev-arr-rsf_