Cape Verde Trade Gap Widens: Import Prices Surge 21%
Cape Verde is grappling with a significant shift in its trade balance as the cost of imported goods skyrocketed in July, while the value of its exports simultaneously declined. According to the latest data released by the National Institute of Statistics (INE), import prices surged by 21.1% compared to the same period last year.
Import Costs Accelerate
The month of July saw a sharp month-on-month acceleration in import costs, rising 5.4%. This represents a notable jump from the 3.8% increase recorded in June. The spike was driven largely by essential industrial needs, with capital goods rising by 9.5% and fuels climbing by 7.9%.
A deeper look into specific sectors reveals even steeper hikes. The cost of chemical and related industrial products jumped by 22.5%, while transport equipment rose by 10.5% and mineral products increased by 7.3%. Consumer goods and intermediate goods also saw modest climbs of 2.2% and 1.9%, respectively. In contrast, a few sectors saw relief, with textile prices dropping by 10.1% and vegetable products edging down by 0.7%.
Export Values Dip
While the cost of bringing goods into the country rose, the value of Cape Verde’s exports moved in the opposite direction. Export prices fell by 1.9% year-on-year. On a monthly basis, the decline was even more pronounced at 3.2%, a sharp reversal from the 2.5% growth seen in June.
Worsening Terms of Trade
This “scissors effect”—rising costs for imports and falling returns for exports—has put significant pressure on the nation’s Terms of Trade Index. The index dropped to 95.6 in July, down from 104.0 in June. This represents an 8.2% monthly decrease and a staggering 19% decline compared to the previous year.
The Foreign Trade Price Index serves as a critical barometer for Cape Verde’s economy, tracking the price fluctuations of goods exchanged between the archipelago and the rest of the world. The current figures highlight a challenging period for the nation’s purchasing power on the global stage.
Image: Pexels – Carlo Jünemann
