Cape Verde forecasts 5.6% growth in 2027
By the AFREEQUE newsroom, based on Expresso das Ilhas
The Cape Verdean government forecasts real growth of 5.6% in 2027, while the Public Finance Council considers this scenario plausible but more exposed to downside risks. The institution forecasts 5.3% and calls for stronger justification of budget assumptions, according to its macroeconomic report.
Cape Verde’s Public Finance Council considers the government’s forecast of 5.6% real growth in 2027 plausible, while judging that the risks are mainly tilted to the downside, according to its report on the macroeconomic assumptions in the draft 2027 state budget. The institution recommends that the government provide better justification for its assumptions and deepen its analysis of the effects of possible shocks on public finances.
The Ministry of Finance forecasts average inflation of 2% in 2027. The Council has a slightly less favourable scenario, with growth of 5.3% and inflation of 2.2%, while the International Monetary Fund forecasts 5% and the Bank of Cape Verde 4.9%, according to the Public Finance Council’s report. It calls in particular for more detailed explanations of the expected trends in tourism, investment and domestic demand.
Cape Verde’s dependence on tourism, fuel imports and food products leaves its economy exposed to fluctuations in international prices. Between July and October 2026, petrol prices rose by 21.7%, regular diesel by 36% and diesel used for electricity generation by 40.9%, a trend that could increase transport, production and energy costs, according to the Council.
In the Ministry of Finance’s adverse scenario, growth would slow to 3% and inflation would reach 4.2%. The Council estimates that such a shock could reduce tax revenue, increase the state’s financing needs and make it harder to reduce public debt. The budget deficit is also expected to stand at 1% of GDP in 2027, compared with 1.9% in 2026, according to the 2027 State Budget Guidelines.
The analysis comes after the International Monetary Fund forecast 5% growth in Cape Verde in 2027, on 18 October. It complements international forecasts already published for the Cape Verdean economy next year.
