Cape Verde's GDP Grows 6.4% in Q1 2026, Driven by Domestic Demand
Cape Verde's Gross Domestic Product (GDP) expanded by 6.4% in the first quarter of 2026. This growth represents a slight deceleration of 0.9 percentage points compared to the 7.3% expansion recorded in the fourth quarter of 2025. The Value Added Gross (VAB) at basic prices also grew by 6.4% in real terms, mirroring the overall GDP trend and showing a 0.9 percentage point decrease from the previous quarter.
On the supply side, key sectors contributing to this growth included fishing and aquaculture, trade and repair, financial and insurance activities, real estate, public administration, and education. Net taxes on products, excluding subsidies, increased by 6.6%, adding 1.0 percentage point to the total GDP variation. However, the agriculture sector continued its negative performance, with a 5.9% decrease in VAB, though less severe than the 24.0% drop in the prior quarter. Civil construction also saw a decline of 3.2%, following a 7.2% reduction in Q4 2025.
Manufacturing industries showed robust growth of 7.6%, contributing 0.4 percentage points to GDP, albeit slower than the 13.1% in the previous quarter. Trade was a significant driver, growing by 7.3%, more than double the 3.3% in Q4 2025. Transportation and storage grew by 4.1%, and accommodation and catering by 0.3%. From the expenditure perspective, private consumption and investment were the main drivers. Private consumption accelerated to 4.5%, and public consumption grew by 10.0%. Investment saw the most significant acceleration, increasing by 15.9%, a substantial rise from 5.9% in the previous quarter.
Exports of goods and services grew by 5.5%, primarily due to a 9.7% increase in services exports, which offset a 5.5% decrease in goods exports. Imports of goods and services rose by 6.9%, with goods imports increasing by 5.7% and services imports by 11.4%. The National Statistics Institute (INE) indicated that domestic demand, particularly investment and private consumption, sustained GDP growth, while fishing, aquaculture, trade, financial services, real estate, public administration, and education were the main supply-side contributors.
The reported GDP growth in Cape Verde for Q1 2026, while positive, indicates a moderation in economic expansion compared to the preceding quarter. The strong performance of domestic demand, especially investment and private consumption, suggests resilience, but the contrasting trends between goods and services exports highlight potential vulnerabilities in the trade balance. The continued decline in agriculture and construction warrants attention, as diversification away from these sectors may be necessary for sustained, broad-based economic development. Future policy focus could explore strategies to bolster export competitiveness in goods while capitalizing on the growth in services, alongside targeted support for sectors facing structural challenges to ensure inclusive and stable economic progress over the next decade.
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