Cabo Verde's Trade Deficit Widens as Exports Fall and Imports Surge in Q2 2026
In the second quarter of 2026, Cabo Verde experienced a significant economic shift, with national exports declining by 9% and imports soaring by 48.2%, according to the National Statistics Institute (INE). Exports dropped from 2,436 million escudos in Q2 2025 to 2,216 million escudos in Q2 2026, a decrease of 220 million escudos. Europe remained the primary destination for exports, accounting for 94.0%, with Spain leading as the top client at 61.2% of exports to Europe, followed by Italy (20.6%) and Portugal (12.0%). Prepared and preserved fish continued to be the leading export product, making up 79.9% of the total, followed by clothing (7.7%) and footwear (3.1%).
Conversely, total imports surged from 44,427 million escudos to 65,863 million escudos, an increase of 21,435 million escudos. Europe was also the main supplier, representing 45.3% of imports, with Portugal being the largest trading partner at 24.2%. Fuels were the dominant import, comprising 52.3% of the total, a significant increase of 95.8% from the previous year. Despite a reduction in the share of most other imported goods, the overall import value rose sharply, largely driven by fuel costs. Re-exports also saw a substantial increase of 53.1%.
The combined effect of falling exports and rising imports led to a widening trade deficit, which grew by 51.6% from a negative 41,991 million escudos in Q2 2025 to a negative 63,646 million escudos in Q2 2026. Consequently, the import coverage ratio by national exports fell to 3.4% in Q2 2026, down from 5.5% in the same period of 2025, indicating a reduced capacity for exports to finance imports.
The stark divergence in export and import trends for Cabo Verde in Q2 2026, particularly the dramatic surge in imports driven by fuel costs alongside a decline in exports, highlights systemic vulnerabilities in the nation's trade balance. This situation puts significant pressure on foreign exchange reserves and the national currency, potentially impacting inflation and economic stability. The heavy reliance on imported fuels, even as other import categories saw reduced participation, suggests an inelastic demand for energy, necessitating a strategic review of domestic energy production or diversification of import sources to mitigate future shocks. The widening trade deficit and declining coverage ratio underscore the imperative for export-led growth strategies, potentially by fostering value-added industries beyond fish products, to create a more resilient economic structure capable of withstanding global commodity price fluctuations and enhancing national economic sovereignty.
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