Cape Verde Inflation Hits 1.6% as Central Bank Cautions
Cape Verde’s cooling price surge continued in June as the average 12-month inflation rate dipped to 1.6%, down slightly from 1.7% in May, according to new data released Monday by the National Institute of Statistics (INE).
Mixed Signals in Current Price Trends
While the long-term average showed a slight decline, other metrics indicate that price pressures are still simmering. The year-on-year inflation rate for June climbed to 1.1%, marking a 0.3 percentage point increase over the previous month.
Core inflation, a key measure that strips out volatile costs like energy and unprocessed food, also saw a modest uptick. It registered a year-on-year variation of 1.4% in June, compared to 1.3% in May, suggesting that underlying price increases remain steady across the broader economy.
Central Bank Braces for Geopolitical Headwinds
Despite the current easing of the 12-month average, the Bank of Cape Verde (BCV) remains cautious about the road ahead. In its most recent economic assessment, the central bank significantly revised its year-end inflation forecast upward, hiking its estimate from 1.7% to 2.7%.
The BCV cited “the escalation of geopolitical tensions,” specifically pointing to ongoing conflicts in the Middle East and international instability, as the primary drivers behind the worsening outlook. These global pressures are expected to keep prices higher for longer than initially anticipated, challenging the archipelago’s recent trend of cooling inflation.
Image: Pexels – Jakub Zerdzicki
