| Summary: | This paper presents Cabo Verde’s 2023 Article IV Consultation, Second Review under the Extended Credit Facility Arrangement, and Request for Modification of a Performance Criterion. Cabo Verde remains vulnerable to external shocks and climate related disruptions and the significant gains achieved so far need to be sustained over the medium term to safeguard economic stability, build resilience, and promote inclusive growth. Fiscal policy aims at ensuring an appropriate balance between credible growth-friendly fiscal consolidations, preserving debt sustainability, protecting the vulnerable, and investing in future growth. It will be important to keep progress in domestic revenue mobilization, streamlining tax exemptions, increasing the effectiveness of public investment projects, and continue improving debt management. Reform of the public enterprises is also critical to reduce fiscal risks. The authorities are encouraged to continue with their ambitious structural reform agenda to adapt to the challenges posed by climate change, reduce the cost of doing business, strengthen social safety nets, and accelerate public enterprise reforms
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