Abstract
This 2016 Article IV Consultation highlights that the economic growth of Cabo Verde in 2015 stagnated at 1.5 percent, slightly below the 1.9 percent registered in 2014. Tourism recovered and remittances remained robust, but foreign direct investment (FDI) and public investment slowed. The unemployment rate declined to 12.4 percent, as did youth unemployment, which nevertheless remained high at 28.6 percent. Consumer price inflation remained muted owing to lower food and energy prices, averaging 0.1 percent for 2015. In 2016, growth is forecast to recover to 3.2 percent supported by FDI, domestic demand, agriculture, and tourism, which should benefit from the mild upswing in Europe.
Background
1. This DSA reflects official debt stock data for end-2015, and additional information available as of October 2016. The staff’s fiscal projections for 2016-19 (Table 3a in the Staff Report) are used to project debt-creating flows. The debt data include central government external and domestic debt, and external debt contracted by the central government on behalf of state-owned enterprises (also referred to as “onlending”). The data do not include the domestic debt contracted directly by state-owned enterprises and local governments that carry a central-government guarantee; at end-2015, this debt was estimated at about 6.1 percent of GDP (preliminary data). Projections for such publicly-guaranteed debt for 2016 and beyond were not available at the time of this assessment.
Cabo Verde: Indicators of Public and Publicly Guaranteed External Debt Under Alternatives Scenarios, 2016—36 1/
Citation: IMF Staff Country Reports 2016, 366; 10.5089/9781475557718.002.A003
Sources: Country authorities; and staff estimates and projections.1/The most extreme stress test is the test that yields the highest ratio on or before 2026. In figu re b. it corresponds to a One-time depreciation shock; in c. to a Exports shock; in d. to a One-time depreciation shock; in e. to a Exports shock and in figure f. to a Combination shock2. Private external debt is relatively low. Private external debt is estimated using non-bank private sector debt data, and balance of payments data on bank liabilities to non-residents. On this basis, private external debt was estimated at around 13 percent of GDP at end-2015. The authorities compile non-bank private sector debt, but there is need for a more systematic monitoring of the repayment flows.
3. Total public debt in Cabo Verde continued to increase in 2015 as a result of the Public Investment Program (PIP). The stock of public debt increased markedly from about 114.5 percent of GDP in 2014 to an estimated 125.8 percent of GDP at end-2015, driven primarily by external debt accumulation to finance the scaling-up of infrastructure. However, low growth, declining prices and the appreciation of the U.S. dollar have also contributed significantly to the increase in the debt ratio.
Cabo Verde: Stock of Total Public Debt at End-Year, 2005-15
Cabo Verde: Stock of Total Public Debt at End-Year, 2005-15
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Percent of GDP) | |||||||||||
| External debt | 49.6 | 46.2 | 39.9 | 38.4 | 43.9 | 50.7 | 57.2 | 68.1 | 78.3 | 87.9 | 96.9 |
| Domestic debt | 35.7 | 31.7 | 24.7 | 19.1 | 21.3 | 21.7 | 21.6 | 23.0 | 24.2 | 26.6 | 28.9 |
| Total public deb’ | 85.3 | 77.9 | 64.6 | 57.4 | 65.2 | 72.4 | 78.8 | 91.1 | 102.5 | 114.5 | 125.8 |
Cabo Verde: Stock of Total Public Debt at End-Year, 2005-15
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Percent of GDP) | |||||||||||
| External debt | 49.6 | 46.2 | 39.9 | 38.4 | 43.9 | 50.7 | 57.2 | 68.1 | 78.3 | 87.9 | 96.9 |
| Domestic debt | 35.7 | 31.7 | 24.7 | 19.1 | 21.3 | 21.7 | 21.6 | 23.0 | 24.2 | 26.6 | 28.9 |
| Total public deb’ | 85.3 | 77.9 | 64.6 | 57.4 | 65.2 | 72.4 | 78.8 | 91.1 | 102.5 | 114.5 | 125.8 |
4. While external public debt is high, it is overwhelmingly concessional. Multilateral institutions, in particular the World Bank Group and the African Development Bank, are the main external creditors. Cabo Verde’s external public debt—including commercial debt, which is subsidized by Portugal—has a long maturity profile and low average interest rates (Text Table 2).
Cabo Verde: External Debt Profile by Type of Creditor, 2015
Cabo Verde: External Debt Profile by Type of Creditor, 2015
| Percent of Total | Average Grace | Average | Average Interest | |
|---|---|---|---|---|
| External Debt | Period | Amortization Period | Rate | |
| Multilateral | 47 | 9 | 32 | 0.9% |
| Bilateral | 23 | 8 | 19 | 1.1% |
| Commercial | 30 | 9 | 20 | 1.6% |
Cabo Verde: External Debt Profile by Type of Creditor, 2015
| Percent of Total | Average Grace | Average | Average Interest | |
|---|---|---|---|---|
| External Debt | Period | Amortization Period | Rate | |
| Multilateral | 47 | 9 | 32 | 0.9% |
| Bilateral | 23 | 8 | 19 | 1.1% |
| Commercial | 30 | 9 | 20 | 1.6% |
5. Cabo Verde’s domestic public debt has risen lately, but its structure and maturity remain favorable. The government’s ability to finance the PIP through concessional external loans has helped keep domestic debt at about 29 percent of GDP at end-2015. Moreover, the authorities strive to limit domestic financing of the deficit to 3 percent of GDP per year. At end-2015 the National Pension Fund held about 43 percent of domestic debt, and the rest was held by the banking system. Treasury bonds make up about 96 percent of domestic debt. The average maturity of domestic debt at end-2014 was about 7 years and the average interest rate was 5.7 percent. Domestic debt is projected to increase gradually, peaking at about 38 percent in 2029 before declining to 35 percent in 2036, while external debt is repaid and net foreign borrowing remains low.
6. Cabo Verde is a strong policy performer for the purpose of determining the debt burden thresholds under the Debt Sustainability Framework (DSF). Cabo Verde’s rating on the World Bank’s Country Policy and Institutional Assessment (CPIA) averaged 3.9 (on a scale of 1 to 6) during 2013-15. Based on its 2015 CPIA score, Cabo Verde ranks second among IDA-recipient countries in the sub-Saharan African (SSA) region. The corresponding external public debt burden thresholds for high risk are shown in Text Table 3.
External Public Debt Thresholds for High Risk for Strong Policy Performers under the Debt Sustainability Framework
External Public Debt Thresholds for High Risk for Strong Policy Performers under the Debt Sustainability Framework
| Present value of external debt, percent of: | |
|---|---|
| GDP | 50 |
| Exports | 200 |
| Revenue | 300 |
| External debt service in percent of: | |
| Exports | 25 |
| Revenue | 22 |
External Public Debt Thresholds for High Risk for Strong Policy Performers under the Debt Sustainability Framework
| Present value of external debt, percent of: | |
|---|---|
| GDP | 50 |
| Exports | 200 |
| Revenue | 300 |
| External debt service in percent of: | |
| Exports | 25 |
| Revenue | 22 |
Baseline Scenario Underlying the Debt Sustainability Analysis
7. The assumptions underlying the current DSA differ in a number of ways from those used in the 2014 Article IV Consultation (Text Table 4 and Box 1). While the current baseline scenario still assumes a rebound of economic activity in the medium term, the growth forecast for 2016-20 is overall lower than in the previous DSA owing to the shifting of some public investment projects into later years. The GDP deflator is projected slightly lower, reflecting the low inflation in the country and in the Euro area. The baseline scenario also assumes a different profile of fiscal consolidation, reflecting the most recent MTFF. The current account deficit is also projected slightly higher, reflecting the large pipeline of FDI for the next few years. Most importantly, the exchange rate depreciation versus the dollar of about 30 percent at end-2015 is carried forward in the projections, contributing significantly to the increase in the PV of debt.
Cabo Verde: Assumptions for Key Economic Indicators, 2015-20
(Percent of GDP)
Cabo Verde: Assumptions for Key Economic Indicators, 2015-20
(Percent of GDP)
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|---|
| Real GDP growth | ||||||
| Current DSA | 1.5 | 3.2 | 3.7 | 4.1 | 4.1 | 4.1 |
| 2014 Article IV DSA | 3.5 | 4.0 | 4.0 | 4.0 | 4.0 | 4.0 |
| GDP Deflator | ||||||
| Current DSA | 0.5 | 0.1 | 1.2 | 1.8 | 2.0 | 2.0 |
| 2014 Article IV DSA | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 |
| Fiscal balance (including grants) | ||||||
| Current DSA | -4.1 | -3.3 | -3.0 | -1.9 | -2.0 | 0.0 |
| 2014 Article IV DSA | -6.5 | -5.7 | -4.6 | -0.5 | -1.3 | -2.5 |
| Overall financing needs (including onlending) | ||||||
| Current DSA | 8.3 | 7.8 | 7.0 | 5.6 | 3.9 | 1.0 |
| 2014 Article IV DSA | 10.4 | 8.9 | 6.9 | 1.5 | 1.3 | 2.5 |
| Current account deficit (including grants) | ||||||
| Current DSA | -4.3 | -7.2 | -8.8 | -8.4 | -7.9 | -7.1 |
| 2014 Article IV DSA | -10.8 | -10.9 | -9.2 | -7.2 | -5.2 | -5.2 |
| Cv$/USD exchange rate (e-o-y) | ||||||
| Current DSA | 101.4 | 100.7 | 100.5 | 100.3 | 99.7 | 99.6 |
| 2014 Article IV DSA | 78.2 | 76.8 | 75.5 | 74.5 | 73.8 | 73.8 |
Cabo Verde: Assumptions for Key Economic Indicators, 2015-20
(Percent of GDP)
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|---|
| Real GDP growth | ||||||
| Current DSA | 1.5 | 3.2 | 3.7 | 4.1 | 4.1 | 4.1 |
| 2014 Article IV DSA | 3.5 | 4.0 | 4.0 | 4.0 | 4.0 | 4.0 |
| GDP Deflator | ||||||
| Current DSA | 0.5 | 0.1 | 1.2 | 1.8 | 2.0 | 2.0 |
| 2014 Article IV DSA | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 |
| Fiscal balance (including grants) | ||||||
| Current DSA | -4.1 | -3.3 | -3.0 | -1.9 | -2.0 | 0.0 |
| 2014 Article IV DSA | -6.5 | -5.7 | -4.6 | -0.5 | -1.3 | -2.5 |
| Overall financing needs (including onlending) | ||||||
| Current DSA | 8.3 | 7.8 | 7.0 | 5.6 | 3.9 | 1.0 |
| 2014 Article IV DSA | 10.4 | 8.9 | 6.9 | 1.5 | 1.3 | 2.5 |
| Current account deficit (including grants) | ||||||
| Current DSA | -4.3 | -7.2 | -8.8 | -8.4 | -7.9 | -7.1 |
| 2014 Article IV DSA | -10.8 | -10.9 | -9.2 | -7.2 | -5.2 | -5.2 |
| Cv$/USD exchange rate (e-o-y) | ||||||
| Current DSA | 101.4 | 100.7 | 100.5 | 100.3 | 99.7 | 99.6 |
| 2014 Article IV DSA | 78.2 | 76.8 | 75.5 | 74.5 | 73.8 | 73.8 |
Cabo Verde: Macroeconomic Assumptions of the Baseline Scenario, 2016-36
Real GDP growth is expected to pick up after the slowdown in 2012-15, and settle at about 4 percent per year in the long term. Growth assumptions are based on continued good performance in the tourism sector, better conditions in the euro area, resumption of private credit growth, some product diversification into areas like agriculture and fisheries, and an increase in productivity owing to payoffs from the PIP and from structural reforms. In addition, medium-term growth projections take into account the impact of PIP containment on the economy over 2015-17, as well as the postponement of several projects to 2018-20 and beyond.
Fiscal policy. In the medium term (2015-20), the fiscal deficit and overall financing needs are expected to decline by 4.1 and 5.9 percent of GDP, respectively, in line with the latest MTFF. Fiscal consolidation is expected to continue in the long run, with the government continuing to reduce its financing needs as the concessional borrowing window closes. In the long run (2019-36), with fiscal consolidation complete and onlending coming to an end, net financing needs are projected to stay below 2 percent of GDP per year.
The non-interest current account deficit is projected to widen in 2016-19 owing to the expected increase in economic activity, public investment and FDI (which will drive up imports) and decline gradually afterwards, as the Public Investment Program winds down.
Consumer price inflation and the GDP deflator are projected not to exceed 2 percent.
Financing. The concessionality of new external loans will decline significantly starting from 2019, and the baseline assumes a slightly more accelerated move towards non-concessional financing than the previous DSA. In addition, the baseline assumes that domestic financing will remain below 3 percent of GDP.
Debt Sustainability Analysis
E. External Public Debt
8. Under the staff baseline scenario, the PV of external debt to GDP breaches the 50 percent threshold significantly. The PV of public and publicly guaranteed (PPG) external debt is expected to peak at 64.4 percent of GDP in 2017, gradually decreasing to below 50 percent by 2023 (Figure 1). The debt service indicators remain safely below the threshold throughout 2036.
Cabo Verde: Indicators of Public Debt Under Alternatives Scenarios, 2016-36 1/
Citation: IMF Staff Country Reports 2016, 366; 10.5089/9781475557718.002.A003
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio on or before 2026. It correponds to a one-time depreciation shock.Revenues are defined inclusive of grants.9. Cabo Verde’s ability to service its debt is most sensitive to a growth slowdown (embedded in the historical scenario) and a one-time depreciation shock. The PV of the debt-to-exports and debt-to-revenue ratio, and the debt service to revenue ratio would breach the threshold under the historical growth scenario. The PV of the debt-to-revenue ratio would breach the threshold under a bound test that entails a 30 percent nominal depreciation shock in 2016, and so would the debt-service-to-revenue ratio (Table 1b, scenario B6). Debt service rises over the medium term owing to the grace period ending for several loans, but remains sustainable and considerably below the threshold in the baseline scenario throughout the projection period.
F. Total Public Debt
10. Total public debt peaks at about 130 percent, and its present value at 96.1 percent of GDP in 2017, and declines gradually over the projection period (Table 2a, Figure 2). The PV of total public debt exceeds the 74 percent benchmark and remains above it until 2028. Furthermore, the debt outlook is vulnerable to a prolonged economic slowdown; developments in the Euro zone, which would affect growth by depressing remittances and tourism income; and realization of losses on contingent liabilities associated with SOEs. With regards to remittances, which accounted for roughly 12 percent of GDP in 2015, there are also vulnerabilities related to financial stability. While these flows have remained fairly stable over many years, problems in a systemic bank could cause emigrants to re-assess their financial investment in Cabo Verde and withdraw their funds. Regarding SOEs, while the financial situation of ELECTRA has improved during 2013-15, TACV’s financial circumstances and the situation at IFH have deteriorated sharply.
11. Public debt sustainability is sensitive to various alternative scenarios and stress tests
(Table 2b). The expansion of public debt is most pronounced under the scenario which keeps real growth and the primary balance at historical averages. However, a primary balance as high as that over the past decade seems unlikely, given that the primary balance over 2005-14 reflects a temporarily high level of public investment.
12. Public debt sustainability is also vulnerable to contingent liabilities associated with the debt of state-owned enterprises (SOEs). At end-2015 (preliminary data), SOE-related contingent liabilities amounted to 25 percent of GDP, up from 9 percent of GDP in 2014. If the financial situation of SOEs were to deteriorate to such an extent that the central government had to take on all of this debt (and respect the 3 percent limit on domestic financing), debt sustainability would be further jeopardized, the serviceability of public debt would be put under significant strain.
G. Comparison with the Previous Debt Sustainability Analysis
13. The PV of external debt does breach the threshold under the staff baseline scenario— which was not the case in the previous DSA—and public debt peaks at a higher level. In the
previous DSA, the PV of external debt to GDP in 2015 was 48.5, and in the current DSA it increases to 61.8, breaching the 50 percent threshold. While the debt profile has deteriorated owing to lower than expected nominal GDP and a strong appreciation of the U.S. Dollar, the authorities PIP containment measures were crucial in curbing the PV of external debt to GDP. In addition, while in the previous DSA public debt peaked at 108 percent of GDP (in 2016), in the current DSA it reaches 130 percent in 2017.
H. The Authorities’ Views
14. The authorities broadly concurred with the results of the DSA. They noted, however, that although the external debt level is high, the public investment scaling up that contributed to it should help increase potential growth and boost revenue in the long term. In addition, the authorities remarked that while the PV of external debt is high, the debt service indicators remain comfortably below the threshold in the baseline scenario.
Debt Distress Classification
15. Based on the external debt burden indicators, the current DSA finds that the risk of debt distress is high but Cabo Verde retains its capability to service its debt. The PV of external debt to GDP threshold is breached over the 20-year projection period under the baseline scenario, and the breach is significant. 2 Furthermore, debt sustainability remains sensitive to a depreciation shock. However, the debt service indicators are comfortably below their respective thresholds.
16. The authorities should stay the course on their fiscal consolidation which should help set the country on the path to moderate risk of debt distress by 2023. Broadly in line with staff advice, the authorities have embarked on a fiscal consolidation driven in large part by a reduction in externally financed capital spending. The fiscal adjustment envisioned is realistic, and necessary to give a strong message of fiscal responsibility to development partners and investors.,
Cabo Verde: External Debt Sustainability Framework, Baseline Scenario, 2013-36 1/
(Percent of GDP, unless otherwise indicated)
Includes both public and private sector external debt.
Derived as [r - g - p(1+g)]/(1+g + p+gp) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = growth rate of GDP deflator in U.S. dollar terms.
Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes.
Assumes that PV of private sector debt is equivalent to its face value.
Current-year interest payments divided by previous period debt stock.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Defined as grants, concessional loans, and debt relief.
Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt).
Cabo Verde: External Debt Sustainability Framework, Baseline Scenario, 2013-36 1/
(Percent of GDP, unless otherwise indicated)
| Actual | Projections | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | Historical 6/ Average | Standard 6/ Deviation | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2016-2021 Average | 2026 | 2036 | 2022-2036 Average | ||
| External debt (nominal) 1/ | 99.8 | 101.3 | 109.8 | 110.2 | 109.3 | 105.9 | 101. 1 | 94. 6 | 87.2 | 60.7 | 28. 4 | |||||
| of which: public and publicly guaranteed (PPG) | 78.3 | 87.9 | 96.9 | 98.1 | 98.4 | 96.2 | 92.1 | 86.3 | 79.7 | 55.6 | 26.9 | |||||
| Change in external debt | 6.4 | 1.4 | 8.5 | 0.4 | -0.9 | -3.4 | -4.8 | -6.5 | -7.4 | -4.6 | -3.5 | |||||
| Identified net debt-creating flows | -3.7 | 0.4 | 16.4 | -1.4 | -0.4 | -0.7 | -0.3 | -3.1 | -6.7 | -10.3 | -6.8 | |||||
| Non-interest current account deficit | 2.8 | 6.1 | 2.2 | 7.9 | 4.4 | 4.9 | 6.5 | 6.8 | 7.5 | 4.5 | 0.3 | -4.2 | -3.7 | -4.1 | ||
| Deficit in balance of goods and services | 15.8 | 18.1 | 16.8 | 20.2 | 21.0 | 21.8 | 22.4 | 18.8 | 14.2 | 7.9 | 5.8 | |||||
| Exports | 47.0 | 47.5 | 42.0 | 43.6 | 44.9 | 45.5 | 45.9 | 46.2 | 46.2 | 47.6 | 48.4 | |||||
| Imports | 62.8 | 65.6 | 58.8 | 63.8 | 65.9 | 67.2 | 68.3 | 65.0 | 60.4 | 55.5 | 54.1 | |||||
| Net current transfers (negative = inflow) | -14.4 | -14.1 | -16.1 | -17.8 | 3.0 | -16.4 | -15.7 | -16.0 | -15.8 | -15.1 | -14.6 | -12.4 | -9.0 | -11.4 | ||
| of which: official | -3.1 | -3.0 | -3.7 | -2.1 | -1.4 | -1.3 | -1.2 | -1.2 | -1.1 | -0.8 | -0.4 | |||||
| Other current account flows (negative = net inflow) | 1.4 | 2.0 | 1.5 | 1.2 | 1.1 | 1.0 | 0.9 | 0.8 | 0.7 | 0.3 | -0.4 | |||||
| Net FDI (negative = inflow) | -3.5 | -6.7 | -5.7 | -7.2 | 3.0 | -5.9 | -6.0 | -6.1 | -6.7 | -6.6 | -6.2 | -6.2 | -4.1 | -5.0 | ||
| Endogenous debt dynamics 2/ | -2.9 | 1.0 | 19.9 | -0.5 | -0.9 | -1.3 | -1.2 | -1.0 | -0.8 | 0.2 | 0. 9 | |||||
| Contribution from nominal interest rate | 2.1 | 2.8 | 2.2 | 3.0 | 3.0 | 3.0 | 2.9 | 2.9 | 2.8 | 2.6 | 2.1 | |||||
| Contribution from real GDP growth | -0.7 | -1.8 | -1.7 | -3.5 | -3.9 | -4.3 | -4.1 | -3.9 | -3.6 | -2.5 | -1.2 | |||||
| Contribution from price and exchange rate changes | -4.3 | 0.0 | 19.4 | |||||||||||||
| Residual (3-4) 3/ | 10.1 | 1.1 | -7.9 | 1.9 | -0.5 | -2.7 | -4.5 | -3.4 | -0.6 | 5.6 | 3. 3 | |||||
| of which: exceptional financing | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||
| PV of external debt 4/ | 74.7 | 75.4 | 75.2 | 73.5 | 71.0 | 67.3 | 62.8 | 46.7 | 23.7 | |||||||
| In percent of exports | 177.9 | 172.9 | 167.6 | 161.7 | 154.6 | 145.6 | 136.1 | 98.2 | 49.1 | |||||||
| PV of PPG external debt | 61.8 | 63.3 | 64.4 | 63.8 | 62.0 | 59.0 | 55.2 | 41.6 | 22. 3 | |||||||
| In percent of exports | 147.2 | 145.1 | 143.4 | 140.4 | 135.0 | 127. 7 | 119.7 | 87.5 | 46. 0 | |||||||
| In percent of government revenues | 259.5 | 268.9 | 265.9 | 260.0 | 250.5 | 238.5 | 225.4 | 171.7 | 92. 0 | |||||||
| Debt service-to-exports ratio (in percent) | 7.0 | 8.8 | 8.7 | 10.5 | 10.6 | 10.8 | 10.8 | 11.7 | 12.5 | 12.7 | 10. 3 | |||||
| PPG debt service-to-exports ratio (in percent) | 5.1 | 4.8 | 6.3 | 6.3 | 6.4 | 6.6 | 6.6 | 7.4 | 8.2 | 8.5 | 6.7 | |||||
| PPG debt service-to-revenue ratio (in percent) | 10.9 | 10.9 | 11.1 | 11.8 | 11.8 | 12.2 | 12.2 | 13.9 | 15.4 | 16.7 | 13.3 | |||||
| Total gross financing need (Billions of U.S. dollars) | 0.0 | 0.1 | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.0 | -0.1 | -0.1 | |||||
| Non-interest current account deficit that stabilizes debt ratio | -3.7 | 4.7 | -6.3 | 4.5 | 7.4 | 10.2 | 12.3 | 11.0 | 7.7 | 0.4 | -0.2 | |||||
| Key macroeconomic assumptions | ||||||||||||||||
| Real GDP growth (in percent) | 0.8 | 1.9 | 1.5 | 3.4 | 3.7 | 3.2 | 3.7 | 4.1 | 4.1 | 4.1 | 4.1 | 3.9 | 4.0 | 4.0 | 4.0 | |
| GDP deflator in US dollar terms (change in percent) | 4.8 | 0.0 | -16.1 | 0.9 | 8.8 | -1.6 | 1.8 | 1.9 | 2.4 | 2.6 | 2.0 | 1.5 | 2.0 | 2.0 | 2.0 | |
| Effective interest rate (percent) 5/ | 2.3 | 2.8 | 1.9 | 3.8 | 1.2 | 2.7 | 2.8 | 2.9 | 3.0 | 3.1 | 3.2 | 2.9 | 4.3 | 7.1 | 5.1 | |
| Growth of exports of G&S (US dollar terms, in percent) | 10.5 | 2.8 | -24.7 | 8.1 | 19.4 | 5.4 | 8.6 | 7.4 | 7.8 | 7.5 | 6.1 | 7.1 | 6.2 | 6.3 | 6.4 | |
| Growth of imports of G&S (US dollar terms, in percent) | -2.5 | 6.4 | -23.7 | 5.4 | 18.2 | 10.1 | 9.1 | 8.2 | 8.3 | 1.6 | -1.3 | 6.0 | 5.6 | 6.0 | 5.3 | |
| Grant element of new public sector borrowing (in percent) | 45.5 | 41.9 | 41.8 | 44.2 | 42.6 | 45.3 | 43.6 | 25.6 | 23.5 | 24.8 | ||||||
| Government revenues (excluding grants, in percent of GDP) | 22.0 | 20.8 | 23.8 | 23.5 | 24.2 | 24.5 | 24.7 | 24.7 | 24.5 | 24.2 | 24.2 | 24.2 | ||||
| Aid flows (in Billions of US dollars) 7/ | 0.3 | 0.2 | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.0 | 0.0 | |||||
| of which: Grants | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||
| of which: Concessional loans | 0.2 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | |||||
| Grant-equivalent financing (in percent of GDP) 8/ | 6.9 | 4.7 | 3.8 | 3.2 | 2.2 | 1.8 | 1.5 | 1.1 | 1.4 | |||||||
| Grant-equivalent financing (in percent of external financing) 8/ | 65.5 | 54.0 | 54.2 | 57.8 | 63.9 | 71.3 | 45.0 | 36.1 | 42.1 | |||||||
| Memorandum items: | ||||||||||||||||
| Nominal GDP (Billions of US dollars) | 1.9 | 1.9 | 1.6 | 1.6 | 1.7 | 1.8 | 1.9 | 2.1 | 2.2 | 3.0 | 5.4 | |||||
| Nominal dollar GDP growth | 5.7 | 1.8 | -14.9 | 1.5 | 5.6 | 6.1 | 6.7 | 6.8 | 6.2 | 5.5 | 6.1 | 6.1 | 6.1 | |||
| PV of PPG external debt (in Billions of US dollars) | 1.0 | 1.0 | 1.1 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | |||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 3.9 | 4.4 | 3.5 | 2.4 | 0.8 | -0.3 | 2.4 | -0.1 | -0.2 | 0.0 | ||||||
| Gross workers’ remittances (Billions of US dollars) | 13.8 | 15.5 | 18.6 | 19.9 | 21.9 | 24.1 | 26.5 | 29.1 | 30.0 | 34.8 | 46.7 | |||||
| PV of PPG externa l debt (in percent of G DP + remitta nces) | 4.9 | 4.8 | 4.7 | 4.5 | 4.2 | 3.9 | 3.8 | 3.3 | 2.3 | |||||||
| PV of PPG external debt (in percent of exports + remittances) | 5.1 | 5.0 | 4.9 | 4.7 | 4.4 | 4.1 | 3.9 | 3.4 | 2.4 | |||||||
| Debt service of PPG external debt (in percent of exports + remittance | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.3 | 0.3 | 0.4 | |||||||
Includes both public and private sector external debt.
Derived as [r - g - p(1+g)]/(1+g + p+gp) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = growth rate of GDP deflator in U.S. dollar terms.
Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes.
Assumes that PV of private sector debt is equivalent to its face value.
Current-year interest payments divided by previous period debt stock.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Defined as grants, concessional loans, and debt relief.
Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt).
Cabo Verde: External Debt Sustainability Framework, Baseline Scenario, 2013-36 1/
(Percent of GDP, unless otherwise indicated)
| Actual | Projections | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | Historical 6/ Average | Standard 6/ Deviation | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2016-2021 Average | 2026 | 2036 | 2022-2036 Average | ||
| External debt (nominal) 1/ | 99.8 | 101.3 | 109.8 | 110.2 | 109.3 | 105.9 | 101. 1 | 94. 6 | 87.2 | 60.7 | 28. 4 | |||||
| of which: public and publicly guaranteed (PPG) | 78.3 | 87.9 | 96.9 | 98.1 | 98.4 | 96.2 | 92.1 | 86.3 | 79.7 | 55.6 | 26.9 | |||||
| Change in external debt | 6.4 | 1.4 | 8.5 | 0.4 | -0.9 | -3.4 | -4.8 | -6.5 | -7.4 | -4.6 | -3.5 | |||||
| Identified net debt-creating flows | -3.7 | 0.4 | 16.4 | -1.4 | -0.4 | -0.7 | -0.3 | -3.1 | -6.7 | -10.3 | -6.8 | |||||
| Non-interest current account deficit | 2.8 | 6.1 | 2.2 | 7.9 | 4.4 | 4.9 | 6.5 | 6.8 | 7.5 | 4.5 | 0.3 | -4.2 | -3.7 | -4.1 | ||
| Deficit in balance of goods and services | 15.8 | 18.1 | 16.8 | 20.2 | 21.0 | 21.8 | 22.4 | 18.8 | 14.2 | 7.9 | 5.8 | |||||
| Exports | 47.0 | 47.5 | 42.0 | 43.6 | 44.9 | 45.5 | 45.9 | 46.2 | 46.2 | 47.6 | 48.4 | |||||
| Imports | 62.8 | 65.6 | 58.8 | 63.8 | 65.9 | 67.2 | 68.3 | 65.0 | 60.4 | 55.5 | 54.1 | |||||
| Net current transfers (negative = inflow) | -14.4 | -14.1 | -16.1 | -17.8 | 3.0 | -16.4 | -15.7 | -16.0 | -15.8 | -15.1 | -14.6 | -12.4 | -9.0 | -11.4 | ||
| of which: official | -3.1 | -3.0 | -3.7 | -2.1 | -1.4 | -1.3 | -1.2 | -1.2 | -1.1 | -0.8 | -0.4 | |||||
| Other current account flows (negative = net inflow) | 1.4 | 2.0 | 1.5 | 1.2 | 1.1 | 1.0 | 0.9 | 0.8 | 0.7 | 0.3 | -0.4 | |||||
| Net FDI (negative = inflow) | -3.5 | -6.7 | -5.7 | -7.2 | 3.0 | -5.9 | -6.0 | -6.1 | -6.7 | -6.6 | -6.2 | -6.2 | -4.1 | -5.0 | ||
| Endogenous debt dynamics 2/ | -2.9 | 1.0 | 19.9 | -0.5 | -0.9 | -1.3 | -1.2 | -1.0 | -0.8 | 0.2 | 0. 9 | |||||
| Contribution from nominal interest rate | 2.1 | 2.8 | 2.2 | 3.0 | 3.0 | 3.0 | 2.9 | 2.9 | 2.8 | 2.6 | 2.1 | |||||
| Contribution from real GDP growth | -0.7 | -1.8 | -1.7 | -3.5 | -3.9 | -4.3 | -4.1 | -3.9 | -3.6 | -2.5 | -1.2 | |||||
| Contribution from price and exchange rate changes | -4.3 | 0.0 | 19.4 | |||||||||||||
| Residual (3-4) 3/ | 10.1 | 1.1 | -7.9 | 1.9 | -0.5 | -2.7 | -4.5 | -3.4 | -0.6 | 5.6 | 3. 3 | |||||
| of which: exceptional financing | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||
| PV of external debt 4/ | 74.7 | 75.4 | 75.2 | 73.5 | 71.0 | 67.3 | 62.8 | 46.7 | 23.7 | |||||||
| In percent of exports | 177.9 | 172.9 | 167.6 | 161.7 | 154.6 | 145.6 | 136.1 | 98.2 | 49.1 | |||||||
| PV of PPG external debt | 61.8 | 63.3 | 64.4 | 63.8 | 62.0 | 59.0 | 55.2 | 41.6 | 22. 3 | |||||||
| In percent of exports | 147.2 | 145.1 | 143.4 | 140.4 | 135.0 | 127. 7 | 119.7 | 87.5 | 46. 0 | |||||||
| In percent of government revenues | 259.5 | 268.9 | 265.9 | 260.0 | 250.5 | 238.5 | 225.4 | 171.7 | 92. 0 | |||||||
| Debt service-to-exports ratio (in percent) | 7.0 | 8.8 | 8.7 | 10.5 | 10.6 | 10.8 | 10.8 | 11.7 | 12.5 | 12.7 | 10. 3 | |||||
| PPG debt service-to-exports ratio (in percent) | 5.1 | 4.8 | 6.3 | 6.3 | 6.4 | 6.6 | 6.6 | 7.4 | 8.2 | 8.5 | 6.7 | |||||
| PPG debt service-to-revenue ratio (in percent) | 10.9 | 10.9 | 11.1 | 11.8 | 11.8 | 12.2 | 12.2 | 13.9 | 15.4 | 16.7 | 13.3 | |||||
| Total gross financing need (Billions of U.S. dollars) | 0.0 | 0.1 | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.0 | -0.1 | -0.1 | |||||
| Non-interest current account deficit that stabilizes debt ratio | -3.7 | 4.7 | -6.3 | 4.5 | 7.4 | 10.2 | 12.3 | 11.0 | 7.7 | 0.4 | -0.2 | |||||
| Key macroeconomic assumptions | ||||||||||||||||
| Real GDP growth (in percent) | 0.8 | 1.9 | 1.5 | 3.4 | 3.7 | 3.2 | 3.7 | 4.1 | 4.1 | 4.1 | 4.1 | 3.9 | 4.0 | 4.0 | 4.0 | |
| GDP deflator in US dollar terms (change in percent) | 4.8 | 0.0 | -16.1 | 0.9 | 8.8 | -1.6 | 1.8 | 1.9 | 2.4 | 2.6 | 2.0 | 1.5 | 2.0 | 2.0 | 2.0 | |
| Effective interest rate (percent) 5/ | 2.3 | 2.8 | 1.9 | 3.8 | 1.2 | 2.7 | 2.8 | 2.9 | 3.0 | 3.1 | 3.2 | 2.9 | 4.3 | 7.1 | 5.1 | |
| Growth of exports of G&S (US dollar terms, in percent) | 10.5 | 2.8 | -24.7 | 8.1 | 19.4 | 5.4 | 8.6 | 7.4 | 7.8 | 7.5 | 6.1 | 7.1 | 6.2 | 6.3 | 6.4 | |
| Growth of imports of G&S (US dollar terms, in percent) | -2.5 | 6.4 | -23.7 | 5.4 | 18.2 | 10.1 | 9.1 | 8.2 | 8.3 | 1.6 | -1.3 | 6.0 | 5.6 | 6.0 | 5.3 | |
| Grant element of new public sector borrowing (in percent) | 45.5 | 41.9 | 41.8 | 44.2 | 42.6 | 45.3 | 43.6 | 25.6 | 23.5 | 24.8 | ||||||
| Government revenues (excluding grants, in percent of GDP) | 22.0 | 20.8 | 23.8 | 23.5 | 24.2 | 24.5 | 24.7 | 24.7 | 24.5 | 24.2 | 24.2 | 24.2 | ||||
| Aid flows (in Billions of US dollars) 7/ | 0.3 | 0.2 | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.0 | 0.0 | |||||
| of which: Grants | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||
| of which: Concessional loans | 0.2 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | |||||
| Grant-equivalent financing (in percent of GDP) 8/ | 6.9 | 4.7 | 3.8 | 3.2 | 2.2 | 1.8 | 1.5 | 1.1 | 1.4 | |||||||
| Grant-equivalent financing (in percent of external financing) 8/ | 65.5 | 54.0 | 54.2 | 57.8 | 63.9 | 71.3 | 45.0 | 36.1 | 42.1 | |||||||
| Memorandum items: | ||||||||||||||||
| Nominal GDP (Billions of US dollars) | 1.9 | 1.9 | 1.6 | 1.6 | 1.7 | 1.8 | 1.9 | 2.1 | 2.2 | 3.0 | 5.4 | |||||
| Nominal dollar GDP growth | 5.7 | 1.8 | -14.9 | 1.5 | 5.6 | 6.1 | 6.7 | 6.8 | 6.2 | 5.5 | 6.1 | 6.1 | 6.1 | |||
| PV of PPG external debt (in Billions of US dollars) | 1.0 | 1.0 | 1.1 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | |||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 3.9 | 4.4 | 3.5 | 2.4 | 0.8 | -0.3 | 2.4 | -0.1 | -0.2 | 0.0 | ||||||
| Gross workers’ remittances (Billions of US dollars) | 13.8 | 15.5 | 18.6 | 19.9 | 21.9 | 24.1 | 26.5 | 29.1 | 30.0 | 34.8 | 46.7 | |||||
| PV of PPG externa l debt (in percent of G DP + remitta nces) | 4.9 | 4.8 | 4.7 | 4.5 | 4.2 | 3.9 | 3.8 | 3.3 | 2.3 | |||||||
| PV of PPG external debt (in percent of exports + remittances) | 5.1 | 5.0 | 4.9 | 4.7 | 4.4 | 4.1 | 3.9 | 3.4 | 2.4 | |||||||
| Debt service of PPG external debt (in percent of exports + remittance | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.3 | 0.3 | 0.4 | |||||||
Includes both public and private sector external debt.
Derived as [r - g - p(1+g)]/(1+g + p+gp) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = growth rate of GDP deflator in U.S. dollar terms.
Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes.
Assumes that PV of private sector debt is equivalent to its face value.
Current-year interest payments divided by previous period debt stock.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Defined as grants, concessional loans, and debt relief.
Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt).
Cabo Verde: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2016-36
(Percent)
Variables include real GDP growth, growth of GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows.
Assumes that the interest rate on new borrowing is by 2 percentage points higher than in the baseline., while grace and maturity periods are the same as in the
Exports values are assumed to remain permanently at the lower level, but the current account as a share of GDP is assumed to return to its baseline level after th an offsetting adjustment in import levels).
Includes official and private transfers and FDI.
Depreciation is defined as percentage decline in dollar/local currency rate, such that it never exceeds 100 percent.
Applies to all stress scenarios except for A2 (less favorable financing) in which the terms on all new financing are as specified in footnote 2.
Cabo Verde: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2016-36
(Percent)
| Projections | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2026 | 2036 | ||||
| PV of debt-to GDP ratio | |||||||||||
| Baseline | 63 | 64 | 64 | 62 | 59 | 55 | 42 | 22 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-2036 1/ | 63 | 65 | 66 | 65 | 66 | 68 | 99 | 110 | |||
| A2. New publtt sector ldans on less favorable terms in 2016-2036 2 | 63 | 66 | 67 | 66 | 63 | 59 | 47 | 31 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 63 | 67 | 69 | 67 | 64 | 60 | 45 | 24 | |||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 63 | 70 | 80 | 78 | 75 | 71 | 52 | 23 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 63 | 71 | 78 | 76 | 72 | 67 | 51 | 27 | |||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 63 | 66 | 68 | 66 | 63 | 59 | 44 | 22 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 63 | 73 | 88 | 86 | 82 | 77 | 57 | 26 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 63 | 91 | 91 | 88 | 84 | 78 | 59 | 32 | |||
| PV of debt-to-exports ratio | |||||||||||
| Baseline | 145 | 143 | 140 | 135 | 128 | 120 | 87 | 46 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-20361/ | 145 | 145 | 145 | 142 | 142 | 147 | 209 | 228 | |||
| A2. New public sector loans on less favorable terms in 2016-2036 2 | 145 | 147 | 147 | 143 | 136 | 129 | 100 | 63 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 145 | 143 | 141 | 135 | 128 | 120 | 87 | 46 | |||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 145 | 192 | 262 | 253 | 239 | 227 | 161 | 69 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 145 | 143 | 141 | 135 | 128 | 120 | 87 | 46 | |||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 145 | 148 | 150 | 144 | 136 | 128 | 93 | 46 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 145 | 168 | 200 | 193 | 183 | 173 | 124 | 56 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 145 | 143 | 141 | 135 | 128 | 120 | 87 | 46 | |||
| PV of debt-to-revenue ratio | |||||||||||
| Baseline | 269 | 266 | 260 | 251 | 239 | 225 | 172 | 92 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-20361/ | 269 | 270 | 268 | 264 | 266 | 277 | 410 | 456 | |||
| A2. New public sector loans on less favorable terms in 2016-2036 2 | 269 | 272 | 272 | 266 | 254 | 242 | 196 | 126 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 269 | 276 | 283 | 273 | 259 | 244 | 186 | 100 | |||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 269 | 290 | 327 | 316 | 302 | 288 | 213 | 93 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 269 | 294 | 318 | 307 | 291 | 275 | 210 | 112 | |||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 269 | 274 | 277 | 268 | 254 | 241 | 182 | 92 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 269 | 303 | 359 | 347 | 330 | 315 | 235 | 108 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 269 | 377 | 369 | 356 | 338 | 319 | 243 | 130 | |||
| Debt service-to-exports ratio | |||||||||||
| Baseline | 6 | 6 | 7 | 7 | 7 | 8 | 8 | 7 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-20361/ | 6 | 6 | 7 | 7 | 8 | 9 | 12 | 28 | |||
| A2. New public sector loans on less favorable terms in 2016-20362/ | 6 | 6 | 7 | 7 | 8 | 9 | 9 | 9 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 6 | 6 | 7 | 7788 | 7 | ||||||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 6 | 8 | 10 | 11 | 12 | 13 | 19 | 10 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 6677788 | 7 | |||||||||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 6 | 6 | 7 | 7 | 8 | 8 | 10 | 7 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 6 | 7 | 8 | 9 | 9 | 10 | 14 | 8 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 6677788 | 7 | |||||||||
| Debt service-to-revenue ratio | |||||||||||
| Baseline | 12 | 12 | 12 | 12 | 14 | 15 | 17 | 13 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-20361/ | 12 | 12 | 13 | 13 | 15 | 17 | 23 | 56 | |||
| A2. New public sector loans on less favorable terms in 2016-2036 2 | 12 | 12 | 12 | 13 | 15 | 17 | 17 | 19 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 12 | 12 | 13 | 13 | 15 | 17 | 18 | 14 | |||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 12 | 12 | 13 | 13 | 15 | 17 | 25 | 14 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 12 | 13 | 15 | 15 | 17 | 19 | 20 | 16 | |||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 12 | 12 | 12 | 13 | 14 | 16 | 19 | 13 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 12 | 13 | 15 | 15 | 17 | 19 | 26 | 16 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 12 | 17 | 17 | 17 | 20 | 22 | 24 | 19 | |||
| Memorandum item: | |||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline)6/ | 29 | 29 | 29 | 29 | 29 | 29 | 29 | 29 | |||
Variables include real GDP growth, growth of GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows.
Assumes that the interest rate on new borrowing is by 2 percentage points higher than in the baseline., while grace and maturity periods are the same as in the
Exports values are assumed to remain permanently at the lower level, but the current account as a share of GDP is assumed to return to its baseline level after th an offsetting adjustment in import levels).
Includes official and private transfers and FDI.
Depreciation is defined as percentage decline in dollar/local currency rate, such that it never exceeds 100 percent.
Applies to all stress scenarios except for A2 (less favorable financing) in which the terms on all new financing are as specified in footnote 2.
Cabo Verde: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2016-36
(Percent)
| Projections | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2026 | 2036 | ||||
| PV of debt-to GDP ratio | |||||||||||
| Baseline | 63 | 64 | 64 | 62 | 59 | 55 | 42 | 22 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-2036 1/ | 63 | 65 | 66 | 65 | 66 | 68 | 99 | 110 | |||
| A2. New publtt sector ldans on less favorable terms in 2016-2036 2 | 63 | 66 | 67 | 66 | 63 | 59 | 47 | 31 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 63 | 67 | 69 | 67 | 64 | 60 | 45 | 24 | |||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 63 | 70 | 80 | 78 | 75 | 71 | 52 | 23 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 63 | 71 | 78 | 76 | 72 | 67 | 51 | 27 | |||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 63 | 66 | 68 | 66 | 63 | 59 | 44 | 22 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 63 | 73 | 88 | 86 | 82 | 77 | 57 | 26 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 63 | 91 | 91 | 88 | 84 | 78 | 59 | 32 | |||
| PV of debt-to-exports ratio | |||||||||||
| Baseline | 145 | 143 | 140 | 135 | 128 | 120 | 87 | 46 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-20361/ | 145 | 145 | 145 | 142 | 142 | 147 | 209 | 228 | |||
| A2. New public sector loans on less favorable terms in 2016-2036 2 | 145 | 147 | 147 | 143 | 136 | 129 | 100 | 63 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 145 | 143 | 141 | 135 | 128 | 120 | 87 | 46 | |||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 145 | 192 | 262 | 253 | 239 | 227 | 161 | 69 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 145 | 143 | 141 | 135 | 128 | 120 | 87 | 46 | |||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 145 | 148 | 150 | 144 | 136 | 128 | 93 | 46 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 145 | 168 | 200 | 193 | 183 | 173 | 124 | 56 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 145 | 143 | 141 | 135 | 128 | 120 | 87 | 46 | |||
| PV of debt-to-revenue ratio | |||||||||||
| Baseline | 269 | 266 | 260 | 251 | 239 | 225 | 172 | 92 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-20361/ | 269 | 270 | 268 | 264 | 266 | 277 | 410 | 456 | |||
| A2. New public sector loans on less favorable terms in 2016-2036 2 | 269 | 272 | 272 | 266 | 254 | 242 | 196 | 126 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 269 | 276 | 283 | 273 | 259 | 244 | 186 | 100 | |||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 269 | 290 | 327 | 316 | 302 | 288 | 213 | 93 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 269 | 294 | 318 | 307 | 291 | 275 | 210 | 112 | |||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 269 | 274 | 277 | 268 | 254 | 241 | 182 | 92 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 269 | 303 | 359 | 347 | 330 | 315 | 235 | 108 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 269 | 377 | 369 | 356 | 338 | 319 | 243 | 130 | |||
| Debt service-to-exports ratio | |||||||||||
| Baseline | 6 | 6 | 7 | 7 | 7 | 8 | 8 | 7 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-20361/ | 6 | 6 | 7 | 7 | 8 | 9 | 12 | 28 | |||
| A2. New public sector loans on less favorable terms in 2016-20362/ | 6 | 6 | 7 | 7 | 8 | 9 | 9 | 9 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 6 | 6 | 7 | 7788 | 7 | ||||||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 6 | 8 | 10 | 11 | 12 | 13 | 19 | 10 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 6677788 | 7 | |||||||||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 6 | 6 | 7 | 7 | 8 | 8 | 10 | 7 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 6 | 7 | 8 | 9 | 9 | 10 | 14 | 8 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 6677788 | 7 | |||||||||
| Debt service-to-revenue ratio | |||||||||||
| Baseline | 12 | 12 | 12 | 12 | 14 | 15 | 17 | 13 | |||
| A. Alternative Scenarios | |||||||||||
| A1. Key variables at their historical averages in 2016-20361/ | 12 | 12 | 13 | 13 | 15 | 17 | 23 | 56 | |||
| A2. New public sector loans on less favorable terms in 2016-2036 2 | 12 | 12 | 12 | 13 | 15 | 17 | 17 | 19 | |||
| B. Bound Tests | |||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2017-2018 | 12 | 12 | 13 | 13 | 15 | 17 | 18 | 14 | |||
| B2. Export value growth at historical average minus one standard deviation in 2017-20183/ | 12 | 12 | 13 | 13 | 15 | 17 | 25 | 14 | |||
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2017-2018 | 12 | 13 | 15 | 15 | 17 | 19 | 20 | 16 | |||
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2017-20184/ | 12 | 12 | 12 | 13 | 14 | 16 | 19 | 13 | |||
| B5. Combination of B1-B4 using one-half standard deviation shocks | 12 | 13 | 15 | 15 | 17 | 19 | 26 | 16 | |||
| B6. One-time 30 percent nominal depreciation relative to the baseline in 20175/ | 12 | 17 | 17 | 17 | 20 | 22 | 24 | 19 | |||
| Memorandum item: | |||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline)6/ | 29 | 29 | 29 | 29 | 29 | 29 | 29 | 29 | |||
Variables include real GDP growth, growth of GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows.
Assumes that the interest rate on new borrowing is by 2 percentage points higher than in the baseline., while grace and maturity periods are the same as in the
Exports values are assumed to remain permanently at the lower level, but the current account as a share of GDP is assumed to return to its baseline level after th an offsetting adjustment in import levels).
Includes official and private transfers and FDI.
Depreciation is defined as percentage decline in dollar/local currency rate, such that it never exceeds 100 percent.
Applies to all stress scenarios except for A2 (less favorable financing) in which the terms on all new financing are as specified in footnote 2.
Cabo Verde: Public Sector Debt Sustainability Framework, Baseline Scenario, 2013—36
(Percent of GDP, unless otherwise indicated)
[Indicate coverage of public sector, e.g., general government or nonfinancial public sector. Also whether net or gross debt is used.]
Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of the last period.
Revenues excluding grants.
Debt service is defined as the sum of interest and amortization of medium and long-term debt.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Cabo Verde: Public Sector Debt Sustainability Framework, Baseline Scenario, 2013—36
(Percent of GDP, unless otherwise indicated)
| Actual | 5/ Average | Standard 5/ Deviation | Estimate | Protections | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2016-21 Average |
2026 | 2036 | 2022-36 Average |
|||||
| Public sector debt 1/ | 102.5 | 114.5 | 125.8 | 129.1 | 130.2 | 128.5 | 124.7 | 118.5 | 113.4 | 93.2 | 62.3 | ||||||
| of which: foreign-currency denominated | 78.3 | 87.9 | 96.9 | 98.1 | 98.4 | 96.2 | 92.1 | 86.3 | 79.7 | 55.6 | 26.9 | ||||||
| Change in public sector debt | 11.4 | 12.0 | 11.3 | 3.4 | 1.1 | -1.7 | -3.9 | -6.1 | -5.2 | -3.8 | -2.8 | ||||||
| Identified debt-creating flows | 8.6 | 18.1 | 17.1 | 1.9 | 0.1 | -2.6 | -4.8 | -7.0 | -5.5 | -3.7 | -2.3 | ||||||
| Primary deficit | 11.4 | 8.5 | 5.1 | 6.3 | 4.7 | 4.0 | 3.8 | 2.4 | 0.8 | -2.1 | -1.0 | 1.3 | -0.4 | -0.5 | -0.4 | ||
| Revenue and grants | 24.5 | 22.6 | 26.2 | 27.4 | 26.0 | 26.0 | 26.1 | 26.0 | 25.7 | 25.1 | 24.7 | ||||||
| of which: grants | 2.5 | 1.8 | 2.4 | 3.8 | 1.8 | 1.5 | 1.3 | 1.3 | 1.2 | 0.9 | 0.5 | ||||||
| Primary (noninterest) expenditure | 35.9 | 31.1 | 31.4 | 31.4 | 29.8 | 28.5 | 26.8 | 23.9 | 24.7 | 24.8 | 24.2 | ||||||
| Automatic debt dynamics | -2.7 | 9.6 | 11.9 | -2.1 | -3.7 | -5.0 | -5.6 | -4.9 | -4.5 | -3.4 | -1.8 | ||||||
| Contribution from interest rate/growth differential | 0.1 | -0.9 | -0.2 | -2.7 | -4.1 | -5.1 | -5.1 | -5.0 | -4.6 | -3.5 | -1.9 | ||||||
| of which: contribution from average real interest rate | 0.8 | 0.9 | 1.5 | 1.3 | 0.5 | 0.1 | 0.0 | 0.0 | 0.0 | 0.2 | 0.6 | ||||||
| of which: contribution from real GDP growth | -0.7 | -1.9 | -1.6 | -3.9 | -4.6 | -5.2 | -5.1 | -4.9 | -4.7 | -3.7 | -2.5 | ||||||
| Contribution from real exchange rate depreciation | -2.8 | 10.6 | 12.1 | 0.6 | 0.5 | 0.0 | -0.4 | 0.0 | 0.1 | ||||||||
| Other identified debt-creating flows | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Privatization receipts (negative) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Debt relief (HIPC and other) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Residual, including asset changes | 2.7 | -6.1 | -5.8 | 1.5 | 0.9 | 1.0 | 0.9 | 0.9 | 0.4 | -0.1 | -0.4 | ||||||
| Other Sustainability Indicators | |||||||||||||||||
| PV of public sector debt | 90.7 | 94.3 | 96.1 | 96.1 | 94.5 | 91.2 | 88.9 | 79.2 | 57.6 | ||||||||
| of which: foreign-currency denominated | 61.8 | 63.3 | 64.4 | 63.8 | 62.0 | 59.0 | 55.2 | 41.6 | 22.3 | ||||||||
| of which: external | 61.8 | 63.3 | 64.4 | 63.8 | 62.0 | 59.0 | 55.2 | 41.6 | 22.3 | ||||||||
| PV of contingent liabilities (not included in public sector debt) | |||||||||||||||||
| Gross financing need 2/ | 18.5 | 13.9 | 12.5 | 11.5 | 11.4 | 10.1 | 8.4 | 5.9 | 7.3 | 7.9 | 6.5 | ||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 345.6 | 344.3 | 369.6 | 369.1 | 362.4 | 350.7 | 346.2 | 315.3 | 233.4 | ||||||||
| PV of public sector debt-to-revenue ratio (in percent) | 380.6 | 400. 6 | 397.2 | 391.6 | 382.0 | 368.8 | 362.9 | 326.8 | 238.1 | ||||||||
| of which: external 3/ | 259. 5 | 268. 9 | 265.9 | 260. 0 | 250.5 | 238.5 | 225. 4 | 171.7 | 92.0 | ||||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 29.2 | 24.2 | 28.3 | 27.5 | 29.2 | 29.6 | 29.5 | 30.8 | 32.3 | 32.9 | 28.2 | ||||||
| Debt service-to-revenue ratio (in percent) 4/ | 32.4 | 26.3 | 31.1 | 31.9 | 31.4 | 31.4 | 31.0 | 32.4 | 33.9 | 34.1 | 28.8 | ||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 0.0 | -3.5 | -6.2 | 0.6 | 2.8 | 4.1 | 4.6 | 4.1 | 4.2 | 3.5 | 2.3 | ||||||
| Key macroeconomic and fiscal assumptions | |||||||||||||||||
| Real GDP growth (in percent) | 0.8 | 1.9 | 1.5 | 3.4 | 3.7 | 3.2 | 3.7 | 4.1 | 4.1 | 4.1 | 4.1 | 3.9 | 4.0 | 4.0 | 4.0 | ||
| Average nominal interest rate on forex debt (in percent) | 1.8 | 1.2 | 1.1 | 1.3 | 0.3 | 1.2 | 1.1 | 1.1 | 1.1 | 1.1 | 1.1 | 1.1 | 1.2 | 1.4 ‘ | 1.2 | ||
| Average real interest rate on domestic debt (in percent) | 2.8 | 5.3 | 5.2 | 2.9 | 1.7 | 5.2 | 3.9 | 3.2 | 2.9 | 2.9 | 2.9 | 3.5 | 2.3 | 2.4 ‘ | 2.3 | ||
| Real exchange rate depreciation (in percent, + indicates depreciation | -4.2 | 13.8 | 14.0 | 1.3 | 9.0 | 0.6 | |||||||||||
| Inflation rate (GDP deflator, in percent) | 1.4 | -0.1 | 0.5 | 1.7 | 1.3 | 0.1 | 1.2 | 1.8 | 2.0 | 2.0 | 2.0 | 1.5 | 2.0 | 2.0 | 2.0 | ||
| Growth of real primary spending (deflated by GDP deflator, in percer | -1.0 | -11.8 | 2.4 | -1.0 | 3.9 | 3.3 | -1.4 | -0.7 | -1.8 | -7.1 | 7.3 | -0.1 | 3.7 | 3.8 | 3.9 | ||
| Grant element of new external borrowing (in percent) | 45.5 | 41.9 | 41.8 | 44.2 | 42.6 | 45.3 | 43.6 | 25.6 | 23.5 | ||||||||
[Indicate coverage of public sector, e.g., general government or nonfinancial public sector. Also whether net or gross debt is used.]
Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of the last period.
Revenues excluding grants.
Debt service is defined as the sum of interest and amortization of medium and long-term debt.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Cabo Verde: Public Sector Debt Sustainability Framework, Baseline Scenario, 2013—36
(Percent of GDP, unless otherwise indicated)
| Actual | 5/ Average | Standard 5/ Deviation | Estimate | Protections | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2016-21 Average |
2026 | 2036 | 2022-36 Average |
|||||
| Public sector debt 1/ | 102.5 | 114.5 | 125.8 | 129.1 | 130.2 | 128.5 | 124.7 | 118.5 | 113.4 | 93.2 | 62.3 | ||||||
| of which: foreign-currency denominated | 78.3 | 87.9 | 96.9 | 98.1 | 98.4 | 96.2 | 92.1 | 86.3 | 79.7 | 55.6 | 26.9 | ||||||
| Change in public sector debt | 11.4 | 12.0 | 11.3 | 3.4 | 1.1 | -1.7 | -3.9 | -6.1 | -5.2 | -3.8 | -2.8 | ||||||
| Identified debt-creating flows | 8.6 | 18.1 | 17.1 | 1.9 | 0.1 | -2.6 | -4.8 | -7.0 | -5.5 | -3.7 | -2.3 | ||||||
| Primary deficit | 11.4 | 8.5 | 5.1 | 6.3 | 4.7 | 4.0 | 3.8 | 2.4 | 0.8 | -2.1 | -1.0 | 1.3 | -0.4 | -0.5 | -0.4 | ||
| Revenue and grants | 24.5 | 22.6 | 26.2 | 27.4 | 26.0 | 26.0 | 26.1 | 26.0 | 25.7 | 25.1 | 24.7 | ||||||
| of which: grants | 2.5 | 1.8 | 2.4 | 3.8 | 1.8 | 1.5 | 1.3 | 1.3 | 1.2 | 0.9 | 0.5 | ||||||
| Primary (noninterest) expenditure | 35.9 | 31.1 | 31.4 | 31.4 | 29.8 | 28.5 | 26.8 | 23.9 | 24.7 | 24.8 | 24.2 | ||||||
| Automatic debt dynamics | -2.7 | 9.6 | 11.9 | -2.1 | -3.7 | -5.0 | -5.6 | -4.9 | -4.5 | -3.4 | -1.8 | ||||||
| Contribution from interest rate/growth differential | 0.1 | -0.9 | -0.2 | -2.7 | -4.1 | -5.1 | -5.1 | -5.0 | -4.6 | -3.5 | -1.9 | ||||||
| of which: contribution from average real interest rate | 0.8 | 0.9 | 1.5 | 1.3 | 0.5 | 0.1 | 0.0 | 0.0 | 0.0 | 0.2 | 0.6 | ||||||
| of which: contribution from real GDP growth | -0.7 | -1.9 | -1.6 | -3.9 | -4.6 | -5.2 | -5.1 | -4.9 | -4.7 | -3.7 | -2.5 | ||||||
| Contribution from real exchange rate depreciation | -2.8 | 10.6 | 12.1 | 0.6 | 0.5 | 0.0 | -0.4 | 0.0 | 0.1 | ||||||||
| Other identified debt-creating flows | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Privatization receipts (negative) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Debt relief (HIPC and other) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
| Residual, including asset changes | 2.7 | -6.1 | -5.8 | 1.5 | 0.9 | 1.0 | 0.9 | 0.9 | 0.4 | -0.1 | -0.4 | ||||||
| Other Sustainability Indicators | |||||||||||||||||
| PV of public sector debt | 90.7 | 94.3 | 96.1 | 96.1 | 94.5 | 91.2 | 88.9 | 79.2 | 57.6 | ||||||||
| of which: foreign-currency denominated | 61.8 | 63.3 | 64.4 | 63.8 | 62.0 | 59.0 | 55.2 | 41.6 | 22.3 | ||||||||
| of which: external | 61.8 | 63.3 | 64.4 | 63.8 | 62.0 | 59.0 | 55.2 | 41.6 | 22.3 | ||||||||
| PV of contingent liabilities (not included in public sector debt) | |||||||||||||||||
| Gross financing need 2/ | 18.5 | 13.9 | 12.5 | 11.5 | 11.4 | 10.1 | 8.4 | 5.9 | 7.3 | 7.9 | 6.5 | ||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 345.6 | 344.3 | 369.6 | 369.1 | 362.4 | 350.7 | 346.2 | 315.3 | 233.4 | ||||||||
| PV of public sector debt-to-revenue ratio (in percent) | 380.6 | 400. 6 | 397.2 | 391.6 | 382.0 | 368.8 | 362.9 | 326.8 | 238.1 | ||||||||
| of which: external 3/ | 259. 5 | 268. 9 | 265.9 | 260. 0 | 250.5 | 238.5 | 225. 4 | 171.7 | 92.0 | ||||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 29.2 | 24.2 | 28.3 | 27.5 | 29.2 | 29.6 | 29.5 | 30.8 | 32.3 | 32.9 | 28.2 | ||||||
| Debt service-to-revenue ratio (in percent) 4/ | 32.4 | 26.3 | 31.1 | 31.9 | 31.4 | 31.4 | 31.0 | 32.4 | 33.9 | 34.1 | 28.8 | ||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 0.0 | -3.5 | -6.2 | 0.6 | 2.8 | 4.1 | 4.6 | 4.1 | 4.2 | 3.5 | 2.3 | ||||||
| Key macroeconomic and fiscal assumptions | |||||||||||||||||
| Real GDP growth (in percent) | 0.8 | 1.9 | 1.5 | 3.4 | 3.7 | 3.2 | 3.7 | 4.1 | 4.1 | 4.1 | 4.1 | 3.9 | 4.0 | 4.0 | 4.0 | ||
| Average nominal interest rate on forex debt (in percent) | 1.8 | 1.2 | 1.1 | 1.3 | 0.3 | 1.2 | 1.1 | 1.1 | 1.1 | 1.1 | 1.1 | 1.1 | 1.2 | 1.4 ‘ | 1.2 | ||
| Average real interest rate on domestic debt (in percent) | 2.8 | 5.3 | 5.2 | 2.9 | 1.7 | 5.2 | 3.9 | 3.2 | 2.9 | 2.9 | 2.9 | 3.5 | 2.3 | 2.4 ‘ | 2.3 | ||
| Real exchange rate depreciation (in percent, + indicates depreciation | -4.2 | 13.8 | 14.0 | 1.3 | 9.0 | 0.6 | |||||||||||
| Inflation rate (GDP deflator, in percent) | 1.4 | -0.1 | 0.5 | 1.7 | 1.3 | 0.1 | 1.2 | 1.8 | 2.0 | 2.0 | 2.0 | 1.5 | 2.0 | 2.0 | 2.0 | ||
| Growth of real primary spending (deflated by GDP deflator, in percer | -1.0 | -11.8 | 2.4 | -1.0 | 3.9 | 3.3 | -1.4 | -0.7 | -1.8 | -7.1 | 7.3 | -0.1 | 3.7 | 3.8 | 3.9 | ||
| Grant element of new external borrowing (in percent) | 45.5 | 41.9 | 41.8 | 44.2 | 42.6 | 45.3 | 43.6 | 25.6 | 23.5 | ||||||||
[Indicate coverage of public sector, e.g., general government or nonfinancial public sector. Also whether net or gross debt is used.]
Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of the last period.
Revenues excluding grants.
Debt service is defined as the sum of interest and amortization of medium and long-term debt.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Cabo Verde: Sensitivity Analysis for Key Indicators of Public Debt, 2016-36
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
Cabo Verde: Sensitivity Analysis for Key Indicators of Public Debt, 2016-36
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2026 | 2036 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 94 | 96 | 96 | 95 | 91 | 89 | 79 | 58 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 94 | 98 | 101 | 104 | 107 | 110 | 124 | 137 |
| A2. Primary balance is unchanged from 2016 | 94 | 96 | 97 | 98 | 99 | 100 | 104 | 102 |
| A3. Permanently lower GDP growth 1/ | 94 | 97 | 98 | 98 | 95 | 94 | 93 | 93 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2017-20 | 94 | 101 | 106 | 106 | 104 | 103 | 99 | 84 |
| B2. Primary balance is at historical average minus one standard deviations in 2017-201 | 94 | 101 | 107 | 105 | 102 | 99 | 88 | 63 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 94 | 101 | 108 | 107 | 104 | 103 | 95 | 75 |
| B4. One-time 30 percent real depreciation in 2017 | 94 | 122 | 120 | 117 | 113 | 110 | 97 | 70 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2017 | 94 | 103 | 103 | 101 | 98 | 95 | 85 | 61 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 344 | 370 | 369 | 362 | 351 | 346 | 315 | 233 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 344 | 377 | 389 | 399 | 412 | 429 | 492 | 553 |
| A2. Primary balance is unchanged from 2016 | 344 | 370 | 374 | 376 | 380 | 389 | 413 | 415 |
| A3. Permanently lower GDP growth 1/ | 344 | 373 | 376 | 374 | 366 | 367 | 368 | 376 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2017-20 | 344 | 386 | 407 | 405 | 398 | 399 | 392 | 340 |
| B2. Primary balance is at historical average minus one standard deviations in 2017-201 | 344 | 389 | 411 | 403 | 391 | 386 | 351 | 256 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 344 | 389 | 414 | 410 | 400 | 398 | 378 | 305 |
| B4. One-time 30 percent real depreciation in 2017 | 344 | 469 | 462 | 450 | 435 | 429 | 386 | 282 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2017 | 344 | 396 | 395 | 388 | 376 | 371 | 337 | 247 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 27 | 29 | 30 | 29 | 31 | 32 | 33 | 28 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 27 | 29 | 30 | 30 | 32 | 34 | 40 | 54 |
| A2. Primary balance is unchanged from 2016 | 27 | 29 | 30 | 30 | 31 | 33 | 35 | 42 |
| A3. Permanently lower GDP growth 1/ | 27 | 29 | 30 | 30 | 32 | 34 | 36 | 39 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2017-20 | 27 | 30 | 32 | 32 | 34 | 35 | 37 | 37 |
| B2. Primary balance is at historical average minus one standard deviations in 2017-201 | 27 | 29 | 30 | 31 | 32 | 33 | 38 | 30 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 27 | 30 | 31 | 31 | 33 | 34 | 38 | 34 |
| B4. One-time 30 percent real depreciation in 2017 | 27 | 32 | 35 | 35 | 37 | 39 | 41 | 39 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2017 | 27 | 29 | 30 | 30 | 31 | 33 | 36 | 30 |
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
Cabo Verde: Sensitivity Analysis for Key Indicators of Public Debt, 2016-36
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2026 | 2036 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 94 | 96 | 96 | 95 | 91 | 89 | 79 | 58 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 94 | 98 | 101 | 104 | 107 | 110 | 124 | 137 |
| A2. Primary balance is unchanged from 2016 | 94 | 96 | 97 | 98 | 99 | 100 | 104 | 102 |
| A3. Permanently lower GDP growth 1/ | 94 | 97 | 98 | 98 | 95 | 94 | 93 | 93 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2017-20 | 94 | 101 | 106 | 106 | 104 | 103 | 99 | 84 |
| B2. Primary balance is at historical average minus one standard deviations in 2017-201 | 94 | 101 | 107 | 105 | 102 | 99 | 88 | 63 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 94 | 101 | 108 | 107 | 104 | 103 | 95 | 75 |
| B4. One-time 30 percent real depreciation in 2017 | 94 | 122 | 120 | 117 | 113 | 110 | 97 | 70 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2017 | 94 | 103 | 103 | 101 | 98 | 95 | 85 | 61 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 344 | 370 | 369 | 362 | 351 | 346 | 315 | 233 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 344 | 377 | 389 | 399 | 412 | 429 | 492 | 553 |
| A2. Primary balance is unchanged from 2016 | 344 | 370 | 374 | 376 | 380 | 389 | 413 | 415 |
| A3. Permanently lower GDP growth 1/ | 344 | 373 | 376 | 374 | 366 | 367 | 368 | 376 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2017-20 | 344 | 386 | 407 | 405 | 398 | 399 | 392 | 340 |
| B2. Primary balance is at historical average minus one standard deviations in 2017-201 | 344 | 389 | 411 | 403 | 391 | 386 | 351 | 256 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 344 | 389 | 414 | 410 | 400 | 398 | 378 | 305 |
| B4. One-time 30 percent real depreciation in 2017 | 344 | 469 | 462 | 450 | 435 | 429 | 386 | 282 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2017 | 344 | 396 | 395 | 388 | 376 | 371 | 337 | 247 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 27 | 29 | 30 | 29 | 31 | 32 | 33 | 28 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 27 | 29 | 30 | 30 | 32 | 34 | 40 | 54 |
| A2. Primary balance is unchanged from 2016 | 27 | 29 | 30 | 30 | 31 | 33 | 35 | 42 |
| A3. Permanently lower GDP growth 1/ | 27 | 29 | 30 | 30 | 32 | 34 | 36 | 39 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2017-20 | 27 | 30 | 32 | 32 | 34 | 35 | 37 | 37 |
| B2. Primary balance is at historical average minus one standard deviations in 2017-201 | 27 | 29 | 30 | 31 | 32 | 33 | 38 | 30 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 27 | 30 | 31 | 31 | 33 | 34 | 38 | 34 |
| B4. One-time 30 percent real depreciation in 2017 | 27 | 32 | 35 | 35 | 37 | 39 | 41 | 39 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2017 | 27 | 29 | 30 | 30 | 31 | 33 | 36 | 30 |
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
