Press Release No. 10/283

Press Release: IMF Executive Board Completes Eighth Review of Cape Verde’s PSI

July 8, 2010

The Executive Board of the International Monetary Fund (IMF) has completed the eighth and final review under a three-year Policy Support Instrument (PSI) for Cape Verde. The Executive Board’s decision was taken on a lapse of time basis. ¹

The review focused on Cape Verde’s policy response and recovery from the global economic crisis. The investment-driven rise in the fiscal deficit helped limit the impact of the slowdown and will likely support the country’s growth potential. Growth is expected to pick up and inflation to remain low, although economic recovery in Cape Verde’s major European trading partners remains fragile.

Cape Verde’s PSI was approved on July 31, 2006 (see Press Release No. 06/172). The arrangement was extended by one year in June 2009. The program’s main objective is to enhance the sustainability of growth and development by maintaining a stable macroeconomic environment and implementing structural reforms. The IMF's framework for PSIs is designed for low-income countries (and small island states) that may not need IMF financial assistance, but still seek close cooperation with the IMF in preparation and endorsement of their policy frameworks.

¹ The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.