IMF国际货币组织全球-Cabo-Verde_Request-for-Disbursement-Under-the-Rapid-Credit-Facility_32页_585kb

Cabo Verde IMF Country Report Summary

Core Content

This document outlines Cabo Verde's Request for Disbursement Under the Rapid Credit Facility (RCF) of the International Monetary Fund (IMF), approved on April 22, 2020, in response to the economic impact of the COVID-19 pandemic. The disbursement amounts to SDR 23.7 million (US$32.3 million), equivalent to 100% of quota, and will be provided as direct budget support to address balance of payment (BOP) needs and fiscal financing gaps.

Main Views and Key Information

Economic Context Pre-COVID-19

• Robust growth and low inflation were observed in recent years.
• Improving fiscal and external positions were supported by revenue mobilization, expenditure restraint, and State-Owned Enterprises (SOEs) reforms.
• Exchange rate regime: Conventional fixed peg to the euro at CVE 110.265 per euro since 1999.
• International reserves were sufficient to support the peg and provide buffers against external shocks.

Impact of the COVID-19 Pandemic

• The economy, heavily reliant on tourism and transport, has been significantly impacted by global economic downturn, travel restrictions, and lockdown measures.
• Growth is projected to contract by 5.5% in 2020, compared to a 5% increase under the Policy Coordination Instrument (PCI).
• Current account deficit is expected to widen to 14.7% of GDP, and BOP financing needs are estimated at €197 million.
• Fiscal position is expected to weaken, with a primary deficit of 5.8% of GDP and a financing gap of 6.9% of GDP.

Policy Measures Taken

• Fiscal measures: Reallocation of non-priority expenditures, temporary tax relief, and support for vulnerable groups.
• Monetary measures: Reduction in policy rates, lowering of reserve requirements, and liquidity support for banks.
• Healthcare measures: Implementation of a National Contingency Plan, quarantine measures, and increased funding for healthcare.
• Social protection actions: Financial support for informal sector workers, vulnerable populations, and microfinance institutions.

Medium-Term Outlook and Risks

• The medium-term outlook remains favorable, assuming a global economic recovery, resumption of tourism, and continued implementation of reforms under the Plan for Sustainable Development (PEDS).
• Growth is projected at 5% in 2021, and will gradually return to pre-pandemic levels by 2022.
• Downside risks include:
  • A protracted global economic downturn.
  • Local outbreaks overwhelming the healthcare system.
  • Weak fiscal consolidation and reform efforts post-pandemic.
  • Weather-related shocks due to Cabo Verde's geographic vulnerability.
• Upside risks are expected to increase as the global economy recovers and reforms are implemented.

RCF Modalities and Staff Appraisal

• The RCF disbursement will cover 15% of the BOP financing gap and provide additional foreign exchange to the Central Bank of Cabo Verde (BCV).
• The capacity to repay the IMF is adequate, with total obligations projected at 2.2% of exports and 3.7% of international reserves by 2025.
• The Debt Sustainability Analysis (DSA) indicates high risk of external and total debt distress, but public debt is considered sustainable with manageable debt service indicators.

Support from Development Partners

• The RCF disbursement is expected to be complemented by loans and grants from the World Bank, European Union, and African Development Bank.
• Grants and concessional loans are critically needed to help the authorities respond effectively to the crisis and preserve debt sustainability.

Conclusion and Recommendations

• The IMF Executive Board has approved the disbursement under the RCF, recognizing the urgent need for financial support.
• The authorities are encouraged to resume reforms and fiscal consolidation post-pandemic to ensure the economy returns to its pre-pandemic medium-term trajectory.
• Continued support from development partners is essential to help mitigate the impact of the pandemic and maintain fiscal stability.

Key Figures and Tables

• Table 1: Fiscal operations of the central government, showing the projected impact of the pandemic on revenues and expenditures.
• Table 2: Balance of payments, highlighting the widening current account deficit and BOP financing gap.
• Table 4: Indicators of capacity to repay the Fund, showing manageable debt service ratios.
• Text Table 1: Fiscal operations, showing the projected primary balance deficit of 5.8% of GDP in 2020.
• Text Table 2: Balance of payments, showing an overall deficit of €197 million in 2020.

Documents Included

• Press Release: Statement by the IMF Executive Board Chair.
• Staff Report: Prepared by the IMF staff for the Executive Board's consideration.
• Statement by the Executive Director: For Cabo Verde.
• Letter of Intent: Attached as an appendix.

Safeguards and Compliance

• The Central Bank of Cabo Verde (BCV) has committed to an updated safeguards assessment, to be completed before any subsequent IMF arrangement.
• The IMF's transparency policy allows for the deletion of market-sensitive information from published documents.