News from Islands
IMF recommended the government of Cape Verde fiscal restraint
The Cape Verde government to exercise "restraint" budget in the coming months, to overcome the effects of rising prices of raw materials and the crisis in the eurozone, warned Monday the Fund International Monetary Fund (IMF).
The warning was made by Nemat Shafik, IMF Deputy Director, who chaired a meeting of the board of the international financial institution in Washington, it was made the second and last performance review of the Cape Verdean economy under the program support (PSI) to the archipelago.
"Given the continuing global economic uncertainty will require containment policies in the coming months to preserve the indexation of the exchange rate and create buffers to any shocks," said Shafik, in a statement released by the IMF after the meeting.
The government also said Shafik, will have to increase domestic revenues, contain costs and to act "cautiously in relation to capital expenditure," depending on "as much as possible" funding the subsidized rates.
For the IMF, the recent actions of the central bank of Cape Verde and the increase in capital requirements for commercial banks will help contain inflation and increase foreign currency reserves.
The latest World Bank forecasts for Cape Verde point to an acceleration of growth of 5.8% in 2011 to 6.4% this year and 6.6% next year.
Source: Macauhub
