Cabo Verde Economy Hits 6.3% Growth as Transport Hurdles Persist

Tourism remains the primary engine of the national economy, contributing 4.1 percentage points to the growth rate, with household spending adding another 2 points. This activity helped drive unemployment down to 6.2%, while the national poverty rate retreated to 51.2%. Financial indicators appear resilient; the country secured a current account surplus of 3.6% of GDP and pushed international reserves to a record €975 million, sufficient to cover 7.1 months of imports.

Infrastructure and Long-term Risks

Despite these gains, the World Bank identifies systemic vulnerabilities. Public debt remains high at 100.7% of GDP, with debt servicing consuming 34.2% of government revenues. The national airline continues to strain state finances through costly guarantees, highlighting the broader issue of state-owned enterprise risk. Furthermore, the economy’s heavy reliance on European travelers—who account for 93% of arrivals—leaves the country exposed to external shocks.

Connectivity remains the critical bottleneck. The report details how aging maritime vessels and unreliable, high-cost air travel stifle trade and keep economic benefits locked within hubs like Sal and Boa Vista. To bridge this gap, the World Bank advocates for performance-based contracts in the transport sector and increased private sector participation. Without these reforms, the bank projects growth to moderate to 4.8% in 2026 as global energy costs place upward pressure on inflation.