Cape Verde Inflation Eases to 1.7% in May 2024
Cape Verde’s average 12-month inflation rate eased to 1.7% in May, marking a slight 0.1 percentage point drop from April, according to the latest data released by the National Institute of Statistics (INE).
The stabilization comes despite rising international fuel prices, which typically threaten to drive up the cost of essential goods. To combat these external pressures, Cape Verde continues to utilize fiscal instruments designed to smooth out monthly price fluctuations. These measures include providing compensation to oil companies to offset import costs, effectively shielding local consumers from the full brunt of global market volatility.
Year-on-Year Growth and Core Inflation
While the 12-month average showed a downward trend, the year-on-year inflation rate for May stood at 0.8%. This represents a 0.5 percentage point increase compared to the same period in April.
Core inflation—a metric that excludes volatile categories such as energy and unprocessed food—recorded a year-on-year change of 1.3%. This figure is a marginal 0.1 percentage point decrease from the previous month, suggesting that underlying price pressures remain relatively contained for now.
Worsening Outlook for Late 2026
Despite the current moderate figures, the Bank of Cape Verde (BCV) has issued a more cautious forecast for the remainder of the year. In May, the central bank revised its annual inflation estimate upward, jumping from an original projection of 1.7% to 2.7%.
The bank attributed this bleaker outlook to deteriorating global stability. “The escalation of geopolitical tensions,” specifically citing ongoing conflicts in the Middle East, is expected to drive up costs and impact supply chains more severely than previously anticipated.
Image: Pexels – Carlo Jünemann
