Unpacking the Inter-IslandConnectivity-Growth nexusCabo-VerdePublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized
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TABLE OF CONTENTSList of Figures, Tables and Boxes Pag. 4Acknowledgements Pag. 5Acronyms and Abbreviations Pag. 6Key Country Economic Characteristics at a Glance Pag. 7Executive Summary Pag. 8PART ITHE STATE OF THE ECONOMY PAG. 12Recent Developments Pag. 12Sustained growth momentum in 2025, supported by tourism and relatively low prices Pag. 12A strong fiscal performance: an overall surplus and debt falling near 100 percent of GDP Pag. 17Strengthening external position with record-level reserves Pag. 22Accommodative monetary policy and stable financial system Pag. 24Continued reduction in poverty and unemployment levels Pag. 25Outlook and Risks Pag. 27PART IIUNPACKING INTER-ISLANDCONNECTIVITY GROWTH NEXUS PAG. 31Context of Cabo Verde’s inter-island connectivity and why it matters for growth Pag. 32Domestic connectivity bottlenecks Pag. 35Market Structure, SOEs, and Competitive Neutrality Pag. 44Policy Directions: Strengthening Market Rules and Service Delivery Pag. 51References Pag. 60Annex Pag. 61
List of Figures, Tables and BoxesFIGURES1.Services are fueling growth Pag. 132. Apart hotels are increasing their share of accommodation options Pag. 133. Exports and private consumption remain key drivers of growth Pag. 154. Inflationary pressures have picked up, reflecting higher food prices Pag. 165. Decomposition of Transport Sector Growth and Real GDP Trends: TheTranspor...