Besides tourism, growth in 2025 will be supported by “investments in the energy sector”.
The AfDB notes that Cabo Verde is coming from a GDP growth rate of 5.4% in 2023 and 7.3% in 2024.
The archipelago’s traditional engine “may be affected by global uncertainty in international trade, reducing global growth and, consequently, tourist demand. The country must continue implementing its economic reforms to strengthen macroeconomic stability,” the financial institution added, in the chapter dedicated to Cabo Verde in the African Economic Outlook (AEO) report for 2025.
Inflation is expected to remain almost unchanged at 1.4% in 2025 and 1.8% in 2026 “due to continued prudent macroeconomic policy.”
The outlook points to a budget deficit decreasing “to 2.4% of GDP in 2025 and 1.8% in 2026, as a result of a broader fiscal base, while the current account deficit is expected to be 2.6% of GDP in 2025 and 3% in 2026.”
The AEO 2025 was released today during the AfDB’s annual meetings in Abidjan, Côte d’Ivoire, whose central theme is mobilizing the continent’s resources to free it from external dependence.
According to the bank, unlocking Cabo Verde’s potential requires “consistent regulation, formalization of the economy, and deepening regional integration.”
“Progress in good governance has been insufficient to mobilize the necessary development capital. Therefore, the country needs to continue implementing reforms that strengthen judicial independence, enforce contracts, increase private sector participation and institutional quality, reduce illicit financial flows, and combat corruption,” it concluded.
