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Cape Verde grew 17 percent in first quarter of the year

Cape Verde’s economy grew almost 17 percent in the first quarter, following a 7 percent increase for the whole of 2021 and a 14.8 percent recession in 2020, according to provisional data released today by INE.

According to the Quarterly National Accounts report from the National Institute of Statistics (INE), Cape Verde’s Gross Domestic Product (GDP) grew 16.8 percent in the first quarter, a performance that compares with a 15.2 percent year-on-year retreat from the first quarter of 2021 and an 11.9 percent increase in the last quarter of last year.

“This increase resulted from the increase in private consumption and exports,” justifies the INE report, in a reference, also, to the recovery in tourism demand for the archipelago.

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The INE also highlights that from January to March 2022 final consumption had a positive year-on-year change of 20.5 percent and that private consumption increased by 27.5 percent. On the other hand, public consumption had a positive year-on-year rate of change of 2.7 percent, in volume, and investment recorded a negative year-on-year change of 24.6 percent.

The Cape Verdean economy had already grown 30.6 percent in the second quarter of 2021 and 10.1 percent in the following quarter, according to the INE.

Overall, according to previous INE data, the Cape Verdean economy grew by seven percent in 2021, after a historic recession of 14.8 percent in 2020, due to the consequences of the pandemic.

Cape Verde’s Prime Minister, Ulisses Correia e Silva, admitted last January to an economic growth of 7.2 percent of GDP in Cape Verde in 2021: “The scenarios that we draw aim to achieve in 2021 [an economic growth of] 7.2 percent, as soon as we close the accounts we will know the level. And the forecast of 6 percent in 2022”.

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“Cape Verde is one of the countries most impacted by the pandemic crisis. We only need to see the economic contraction of 14.8 percent in 2020 for us to have an idea of the intensity and size of that impact,” the prime minister admitted at the time.

The Cape Verdean government forecast economic growth between 6.5 and 7.5 percent of GDP in 2021, driven by an upturn in tourism demand, which occurred mainly in the last quarter, and six percent in 2022, which has since been revised to four percent due to the consequences of the war in Europe.

Cabo Verde is facing a deep economic and financial crisis, due to the sharp drop in tourism demand – a sector that guarantees 25 percent of the archipelago’s GDP – since March 2020, due to the Covid-19 pandemic, aggravated in recent weeks by the escalating prices of fuel and food products due to the war in Ukraine.

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