IMF Executive Board Concludes the 2025 Article IV Consultation, Seventh Review under the Extended Credit Facility Arrangement, and Third Review under the Resilience and Sustainability Facility Arrangement with Cabo Verde

IMF News, February 7, 2026

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IMF Executive Board Concludes the 2025 Article IV Consultation, Seventh Review under the Extended Credit Facility Arrangement, and Third Review under the Resilience and Sustainability Facility Arrangement with Cabo Verde

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Bibliographic details

• Published: February 7, 2026

Board actions and financing

• Completed the 2025 Article IV consultation, the seventh ECF arrangement review, and the third RSF arrangement review.
• Access under the ECF arrangement: 220 percent of quota (SDR 52.14 million, approximately US$ 71.28 million).
• Access under the RSF arrangement: 100 percent of quota (SDR 23.69 million, approximately US$ 32.39 million).
• Completion of the seventh ECF review allows disbursement of SDR 2.37 million (approximately US$ 3.25 million).
• Completion of the third RSF review allows disbursement of up to SDR 5.264 million (approximately US$ 7.23 million).
• Authorities consented to publication of the Staff Report prepared for this consultation.

Recent economic performance

• Real GDP growth: 7.2 percent in 2024; estimated 5.2 percent in 2025.
• Inflation: 1.0 percent on average in 2024; stable around the 2 percent target and 2.2 percent average in 2025 (staff projection).
• Current account: recorded a surplus in 2024 and projected to post another surplus in 2025.
• International reserves: reached €1.06 billion in December 2025, above the target of 5.5 months.
• Financial system: described as liquid, profitable, and well capitalized.
• Fiscal performance: met program targets in 2025, driven by strong revenue momentum and tight control of current spending; execution of capital spending remains low.
• Public debt-to-GDP: on a downward path.

Program performance and structural reforms

• All end-June 2025 quantitative performance criteria (PCs), continuous PCs and Indicative Targets (ITs) were met, except the September 2025 IT on social spending.
• No Structural Benchmarks (SBs) were due for this review.
• Structural reform progress:
  • Amendments to the Banco de Cabo Verde Organic Law were passed (noted as an important governance reform).
  • Two out of three Reform Measures for the third RSF review were completed.

Near-term outlook and risks

• Growth outlook: estimated 5.2 percent in 2025; projected to converge to potential growth over the medium term (2026 projection: 5.1 percent).
• Inflation projection: around 2 percent.
• Primary surplus: projected at 1.3 percent of GDP in 2026 and to stabilize at around 1.2 percent of GDP over the medium term.
• Current account: surplus in 2025 projected to move to a moderate deficit over 2026-30 due to higher climate spending and increased imports from robust domestic demand.
• Main risks identified:
  • Global growth slowdown and trade tensions.
  • Financing pressures and climate shocks.
  • Fiscal risks from state-owned enterprises (SOEs), particularly in transport and energy.
  • High level of debt remains a source of vulnerability; concessional financing is important to limit debt servicing cost.
• Upside: stronger tourism growth could boost overall economic activity.

Policy messages and recommendations

• Fiscal policy:
  • Anchor policy in continued debt reduction.
  • Authorities to channel any revenue overperformance or expenditure savings toward strengthening the primary balance and accelerating decline in the debt-to-GDP ratio.
  • Implement tax reforms including VAT modernization and reduced exemptions to broaden the revenue base and improve compliance.
  • Contain current spending, rationalize current spending, and improve public investment management.
  • Implement measures to reduce fiscal risks from SOEs, especially in transport and energy sectors.
• Monetary policy:
  • Maintain focus on safeguarding the exchange rate peg and supporting reserve accumulation.
  • Banco de Cabo Verde to remain ready to respond to emerging price pressures and evolving capital flow dynamics.
  • Enhance liquidity management and monetary policy transmission; strengthen the communication framework including through forward guidance.
  • Maintain positive interest-rate differential relative to the ECB to help reverse capital outflows and bolster reserves.
• Financial sector and supervision:
  • Enhance supervision and macroprudential policy to safeguard financial stability.
  • Strengthen liquidity management, restore reserve requirements, and advance Basel III reforms.
  • Strengthen the AML/CFT framework and closely monitor non-performing loans and sovereign-bank nexus related risks.
• Structural reforms:
  • Improve the business environment, expand social protection, and enhance financial access.
  • Under the RSF, integrate climate risks into fiscal planning, mobilize climate finance, and implement reforms in energy and water sectors to upgrade infrastructure, lower costs, and spur private investment.

Executive Board Assessment

• Directors agreed with the thrust of the staff appraisal and welcomed prudent macroeconomic management, strong program performance, and continued reform momentum.
• Emphasized downside risks, particularly from external shocks and fiscal vulnerabilities.
• Urged prudent macroeconomic policies and advancing reforms to boost productivity, foster inclusive growth, and strengthen resilience.
• Recommended saving revenue overperformance or expenditure under-execution to accelerate debt reduction and modernizing VAT and revenue administration.
• Supported monetary stance to safeguard the peg and reserves, and called for strengthened communication and vigilance on inflation.
• Encouraged financial sector vigilance and structural reforms supported by RSF to enhance resilience and mobilize climate finance.

Selected economic indicators (annual unless stated)

• Population (millions, 2024): 0.5
• Per capita GDP ($, 2024): 5,329
• Quota (current, millions SDR): 23.7
• Literacy/poverty rate (2015): 98.0/35.0
• Main products and exports: Tourism
• Key export markets: European Union

Indicator values (2024 Act.; 2025 proj.; 2026 proj.):

• Real GDP growth (%): 7.2; 5.2; 5.1
• Unemployment (%): n.a.
• Inflation - average (in %): 1.1; 2.2; 2.0
• Revenue (% GDP): 25.0; 26.5; 26.2
• Expenditure (% GDP): 26.1; 27.7; 27.2
• Primary Balance (% GDP): 1.3; 0.9; (no 2026 explicit? table shows) 0.9; (and listed elsewhere projection 1.3 in 2026 — staff text projection)
• Fiscal balance (% GDP): -1.1; -1.2; -0.9
• Public debt (% GDP): 112.0; 102.5; 97.0
• Broad money (% change): 7.7; 9.8; 7.9
• Credit to private sector (% change): 6.4; 6.8; 6.3
• Current account (% GDP): 3.9; 3.1; -0.2
• FDI (% GDP): 3.3; 3.5
• Reserves (in months of current imports): 6.2; 6.9; 7.1
• External debt (% GDP): 76.4; 68.2; 63.2

Press Release No. 26/036, IMF Communications Department, February 6, 2026.

References

• PRESS CENTER
• Cabo Verde and the IMF
• IMF Policy Advice -- A Factsheet
• IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet
• Press Releases
• Extended Credit Facility (ECF) arrangement
• Resilience and Sustainability Facility (RSF) arrangement
• http://www.IMF.org/external/np/sec/misc/qualifiers.htm
• https://www.imf.org/en/home