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Opposition Party Says Fitch Rating Lowering “One Of The Most Difficult Moments In Cabo Verde’s Economic History”

Opposition Party Says Fitch Rating Lowering “One Of The Most Difficult Moments In Cabo Verde’s Economic History”

From Asemana

Opposition party MpD believes that Fitch Rating’s decision to lower Cape Verde’s debt rating from BB- To B and estimate that the public debt will represent 115 percent of GDP in 2015 and 120 percent in 2017 is “bad news” and “one of the most difficult moments in Cape Verde’s economic history.” In the face of this scenario, which has become even worse with the contingent of state enterprises whose finances are guaranteed by the state, the main opposition party advises the government to establish rules, limits and priorities so that indebtedness translates into economic returns and growth.

In a press conference, six days after Fitch lowered Cape Verde’s rating on two different levels, Olavo Correia, one of the party’s vice-chairmen, called the macro-economic picture “worrying,” and highlighted the fact that the MpD had warned the government about the situation.

“We are seeing the failure of economic policies. The negative results are evident. Indebtedness without growth leads to impoverishment and economic unsustainability,” said Olavo Correia, who warned that, with the contingent of public companies that rely in the State, the ratio could go beyond 130% of GDP in 2015 and 135 percent in 2016. This is the “worst case” scenario, given that the debt is tantamount to a “postponed tax” that will be paid by all Cape Verdean taxpayers.

Read more at Asemana