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Date: 09/06/2010
TOURISM GROWS AND CAPE VERDE'S ECONOMIC PERFORMANCE REMAINS STRONG

"Cape Verde's economic and policy performance remains strong, and it has weathered the global crisis relatively well'
Ms. Valerie Cerra, leader of an IMF Mission to Cape Verde visited Cape Verde during May 13-25 to conduct discussions on the eighth and final review under the Policy Support Instrument (PSI). At the conclusion of the visit, Ms. Cerra made the following very positive statement:

"Cape Verde's economic and policy performance remains strong, and it has weathered the global crisis relatively well thanks to prudent macroeconomic management and sizable fiscal and reserve buffers built up in recent years. After a moderation of growth in 2009, growth should pick up in 2010 and beyond, led by tourism and investment-related sectors. Inflation should remain low, consistent with the peg to the euro."

"The fiscal policy response to the global downturn in 2009 was appropriate. The mission supports the government's efforts to protect the poor and vulnerable through social spending and to temporarily accelerate its investment program from 2009 as counter-cyclical stimulus to the slowdown. Looking ahead, the main challenge will be to efficiently implement the program of public investment to boost long-term growth while safeguarding the sustainability of debt. The exchange rate peg remains an appropriate monetary anchor. In light of the buildup in foreign reserves so far this year, the mission sees scope for a further gradual lowering of the policy rate to reduce the spread over the Euro Interbank Offered Rate, the benchmark rate of the euro money market."

"All quantitative performance criteria established for end-December 2009 have been met and progress has been made on the remaining structural benchmarks for the PSI. The authorities expect that the indicative targets for end-June 2010 will also be met. IMF staff will continue its close dialogue with the Cape Verde government with a view to completing the eighth review and returning in a few months to discuss a new PSI arrangement. The mission would like to thank the authorities and citizens of Cape Verde for their excellent cooperation and warm hospitality."

Tourism in Cape Verde also grew in 2009 by 5.5% during the recession.

Cape Verde received 92,000 tourists in the first quarter of the year,. a rise of 5.5 percent against the same period of 2009, the National Statistics Institute (INE) said Thursday in Praia.

Figures from the Survey on Movement of Guests showed that in the first quarter of 2010 almost 5,000 more tourists checked in to Cape Verde’s accommodation units than in the same quarter of 2009.

Sal Island remained the preferred destination of most of the visitors, with 45.8 percent of total entries, followed by Boavista (27.2 percent), and Santiago.

The United Kingdom remained in top spot in terms of number of overnight stays with 25.2 percent of the total, followed by Germany, France, Italy and Portugal with 14.4 percent, 9.8 percent, 9.1 percent and 9 percent, respectively.

Most tourists from the UK stayed in Sal, which accounted for 59.1 percent of overnight stays and chose hotels to stay in, accounting for 98.4 percent of the total.

INE noted that Germany and France had seen a rise in the number of tourists arriving in Cape Verde and in the quarter under review took second and third places in terms of entries and overnight stays






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