The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This Selected Issues paper examines macroeconomic challenges for a highly tourism-based economy such as Cape Verde. The changing structure of Cape Verde's balance-of-payments financing calls for a closer look at the volatility of remittances and their role as an absorber of economic shocks. The paper finds that compared with other external inflows, remittances continue to be a reliable source of foreign financing, but they are declining in importance. It also shows that this influence seems to be gradually fading, and remittances are becoming increasingly procyclical.