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Cabo Verde - Joint World Bank-IMF Debt Sustainability Analysis (English)

Cabo Verde’s risk of external and overall debt distress remains high, unchanged from the joint Debt Sustainability Analysis (DSA) of April 2020. The present value (PV) of public and publicly guaranteed (PPG) external debt-to-GDP ratio breaches its threshold during 2020–2024 under the baseline, and protractedly under stress test scenarios. The PV of total public debt-to-GDP ratio is projected to breach its threshold during 2020–2027 under the baseline scenario and during 2020–2031 under stress test scenarios. The debt sustainability assessment is predicated on several assumptions, including a gradual recovery of economic activity in 2021, reprofiling of debt service of all official bilateral creditors under the debt service suspension initiative (DSSI), growth friendly fiscal consolidation in the post-pandemic period as well as resumption of structural reforms, notably to restructure State-Owned Enterprises (SOEs) and improve the business environment. Prudent borrowing policies and strengthened debt management, as well as measures to enhance the functioning of the government securities market are critical to stabilizing debt dynamics over time. In view of Cabo Verde’s vulnerability to exogenous shocks, sustained progress in export and output diversification are also needed for long-term debt sustainability.

Details

  • Document Date

    2020/10/01

  • Document Type

    Board Report

  • Report Number

    155299

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2020/12/21

  • Disclosure Status

    Disclosed

  • Doc Name

    Cabo Verde - Joint World Bank-IMF Debt Sustainability Analysis

  • Keywords

    debt service; public debt; domestic debt; contingent liability; contingent liabilities; real gdp; total public debt; debt-creating flow; baseline scenario; public sector debt; nominal interest rate; disaster risk management; real exchange rate depreciation; Public and Publicly Guaranteed; state-owned enterprise; real interest rate; extra budgetary fund; financing need; average interest rate; debt external; social security fund; current account deficit; grace period; primary balance; stock of debt; primary fiscal deficit; long-term debt sustainability; private external debt; exchange rate change; total external debt; external debt service; external debt burden; debt sustainability analysis; primary deficit; alternative scenarios; gross public debt; risk of debt; public private partnership; real growth rate; fiscal consolidation effort; domestic revenue mobilization; macroeconomic and fiscal; international investment position; exchange rate projections; current account balance; external debt accumulation; domestic revenue collection; balance of payment; net domestic borrowing; Effective interest rate; external debt sustainability; private investment rate; exchange rate risk; public external debt; publicly guarantee debt; private sector debt; domestic banking system; management of state; commodity price shock; debt management practice; production and export; debt management strategy; medium-term debt sustainability; domestic public debt; debt service ratio; public sector borrowing; high public debt; change in arrears; external debt stock; external public debt; nominal depreciation; dollar term; prudent borrowing; government security; export ratio; fiscal adjustment; fiscal position; debt relief; capital flow; debt dynamic; short-term debt; overall debt; macroeconomic assumption; international reserve; financial market; grant element; concessional loan; Exchange Rates; critical infrastructure; tourism activities; tourism activity; economic recovery; private debt; private entity; sustainability indicator; natural disaster; first year; data availability; bilateral creditor; external financing; debt coverage; business environment; exogenous shock; high ratio; external borrowing; projection period; total stock

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Citation

Cabo Verde - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/792141608602532844/Cabo-Verde-Joint-World-Bank-IMF-Debt-Sustainability-Analysis