[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110209-en":3,"doc-seo-110209-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},110209,8796095360427,"Lucas Martin","https://ap-avatar.wpscdn.com/davatar_994ba38a5ba835b3df7d355c54d3ed8d",8,"Research & Report","CABO VERDE: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS - Risk and Debt Coverage Findings","Cabo Verde’s overall debt distress risk remains high, while external debt distress risk stays moderate, unchanged from the previous joint WB/IMF DSA. External risk shows limited capacity to absorb shocks: PV of PPG external debt-to-GDP stays below the threshold under the baseline but breaches it under export stress tests. Liquidity indicators remain well below thresholds, reflecting highly concessional external debt, yet total public debt-to-GDP breaches thresholds during 2023–2027 and under multiple stress tests, with sustainability supported by consolidation, reforms, and stronger debt management.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nAbebe Adugna and Manuela Francisco (IDA); Costas Christou and Peter Dohlman (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \n\n| CABO VERDE: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | Moderate |\n| Overall risk of debt distress | High |\n| Granularity in the risk rating | Limited space to absorb shocks |\n| Application of judgment | No |\n\nCabo Verde’s risk of overall debt distress remains high, unchanged from the last joint WB/IMF Debt Sustainability Analysis (DSA) of June 20221 and the risk of external debt distress remains moderate. The granularity in the risk rating of external debt distress indicates that it has limited space to absorb shocks. The present value (PV) of public and publicly guaranteed (PPG) external debt-to-GDP ratio is below the threshold over the forecast period and breaches the threshold protractedly under the export stress test. The lower PV of debt path compared to the last DSA reflects mainly the faster than anticipated rebound in growth in 2022. Liquidity indicators (debt service to revenue and to export ratios) remain firmly below their respective thresholds under the baseline, reflecting the highly concessional nature of Cabo Verde’s external debt. The PV of total public debt-to-GDP ratio is projected to breach the threshold during 2023–2027 under the baseline scenario, an improvement on the previous DSA when the breach was of a longer duration, but protractedly breaches the threshold under two of the stress tests. The external and overall debt outlook is assessed to be sustainable and is predicated on several assumptions, including growth converging to, and remaining near potential, sustained fiscal consolidation in line with the ECF program, as well as acceleration of structural reforms, particularly to restructure State-Owned Enterprises (SOEs) to reduce fiscal risks (including from contingent liabilities) and improve the business environment. Prudent borrowing policies through sourcing mainly concessional external loans and strengthened debt management, as well as measures to enhance the functioning of  \n1Cabo Verde’s debt-carrying capacity is assessed as “strong” as in the previous DSA with a composite index score of 3.22, which is based on the October 2022 WEO and the 2021 CPIA.  \nthe government securities market are critical to sustainable debt dynamics over time. In view of Cabo Verde’s vulnerability to exogenous shocks, continuous progress in export and output diversification is also needed for longterm debt sustainability.  \n1. The debt coverage in this DSA comprises debt owed by the central government and certain government guarantees. Coverage of the public sector is in line with the previous DSA (Table 1) . Consistent with the fiscal accounts, social security funds and local governments are excluded from the DSA, while the coverage of extra budgetary funds (EBFs) is focused on government support to State-Owned Enterprises (SOEs) through on-lending and capitalization. Government guarantees to SOEs’ external borrowing are included in the baseline stock of debt, but publicly guaranteed domestic debt and non-guaranteed debt by SOEs are not included. Efforts to broaden the coverage of public sector debt are ongoing, including under a World Bank project focused on SOEs.2 External debt is defined on a residency basis.  \n2. The contingent liability tailored stress test is amended to reflect gaps in the debt coverage discussed above (Table 1) . First, the default shock of 0 percent of GDP for the components of general government not captured in the baseline stock of debt is kept at the default level consistent with the size of publicly guaranteed domestic debt of local governments. The social security fund (INPS) financial position is strong, and fiscal risk is minimal, as a result the contingent liab","cbCaij5SOODialbG","https://ap.wps.com/l/cbCaij5SOODialbG","pdf",2035280,1,22,"English","en",105,"# Risk ratings and key findings\n## External vs overall debt distress\n## Threshold breaches and liquidity indicators\n# Assumptions supporting sustainability\n## Fiscal consolidation and reforms\n## Restructuring SOEs and debt management\n# Scope and methodology of the DSA\n## Debt coverage definitions\n## Contingent liability stress tests\n# Context and macro-debt background\n## Pre-pandemic growth and reforms\n## Impact of COVID-19 on debt levels","[{\"question\":\"What are the reported debt distress risks for Cabo Verde in this joint analysis?\",\"answer\":\"Overall debt distress risk is rated High, while external debt distress risk is rated Moderate. These ratings remain unchanged from the previous June 2022 joint WB/IMF DSA.\"},{\"question\":\"How do the debt burden indicators behave under baseline and stress scenarios?\",\"answer\":\"The PV of PPG external debt-to-GDP remains below the threshold during the forecast under the baseline but breaches it under the export stress test for a prolonged period. The PV of total public debt-to-GDP is projected to breach the threshold during 2023–2027 under the baseline, and continues protracted breaches under two stress tests.\"},{\"question\":\"Why is debt sustainability considered possible despite threshold breaches?\",\"answer\":\"Sustainability is assessed as supported by assumptions such as growth staying near potential and sustained fiscal consolidation under the ECF program, along with accelerated structural reforms. Key measures include restructuring state-owned enterprises to reduce fiscal risks and prudent borrowing mainly on concessional terms with strengthened debt management.\"}]",1784484387,55,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"cabo-verde-joint-bank-fund-debt-sustainability-analysis-risk-and-debt-coverage-findings","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/cabo-verde-joint-bank-fund-debt-sustainability-analysis-risk-and-debt-coverage-findings/110209/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-22","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What are the reported debt distress risks for Cabo Verde in this joint analysis?","Question",{"text":75,"@type":76},"Overall debt distress risk is rated High, while external debt distress risk is rated Moderate. These ratings remain unchanged from the previous June 2022 joint WB/IMF DSA.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"How do the debt burden indicators behave under baseline and stress scenarios?",{"text":80,"@type":76},"The PV of PPG external debt-to-GDP remains below the threshold during the forecast under the baseline but breaches it under the export stress test for a prolonged period. The PV of total public debt-to-GDP is projected to breach the threshold during 2023–2027 under the baseline, and continues protracted breaches under two stress tests.",{"name":82,"@type":73,"acceptedAnswer":83},"Why is debt sustainability considered possible despite threshold breaches?",{"text":84,"@type":76},"Sustainability is assessed as supported by assumptions such as growth staying near potential and sustained fiscal consolidation under the ECF program, along with accelerated structural reforms. Key measures include restructuring state-owned enterprises to reduce fiscal risks and prudent borrowing mainly on concessional terms with strengthened debt management.","https://schema.org",{"og:url":51,"og:type":87,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":89,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":92},[93,97,101,105,110,115,120,123,128,131,135],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":94,"show_sort_weight":95,"slug":96},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":98,"show_sort_weight":99,"slug":100},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":102,"show_sort_weight":103,"slug":104},"Exam",70,"exam",{"id":106,"doc_module":4,"doc_module_name":45,"category_name":107,"show_sort_weight":108,"slug":109},5,"Comic",60,"comic",{"id":111,"doc_module":4,"doc_module_name":45,"category_name":112,"show_sort_weight":113,"slug":114},6,"Technology",50,"technology",{"id":116,"doc_module":4,"doc_module_name":45,"category_name":117,"show_sort_weight":118,"slug":119},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":121,"slug":122},30,"research-report",{"id":124,"doc_module":4,"doc_module_name":45,"category_name":125,"show_sort_weight":126,"slug":127},9,"Religion & Spirituality",20,"religion-spirituality",{"id":126,"doc_module":4,"doc_module_name":45,"category_name":129,"show_sort_weight":126,"slug":130},"World Cup","world-cup",{"id":132,"doc_module":4,"doc_module_name":45,"category_name":133,"show_sort_weight":132,"slug":134},10,"Lifestyle","lifestyle",{"id":136,"doc_module":4,"doc_module_name":45,"category_name":137,"show_sort_weight":106,"slug":138},19,"General","general"]