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Economic impact of tourism in Cabo Verde: a CGE analysis

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Abstract

Tourism, a major economic activity in Cabo Verde, contributes largely to GDP and employment. The long-run economic impact of tourism in Cabo Verde is examined using a dynamic computable general equilibrium model and simulation analyses where the demand for tourism is increased by 10%, and the tax burden is reduced by half. Results show real GDP rising above its long-run growth path by 1.31 and 1.00 percentage points in 2030 and by 0.61 and 0.47 percentage points in 2050 in the demand and supply shocks, respectively. Despite considerable leakage, these shocks lead to improvement in the primary budget balance.

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Authors and Affiliations

  1. Department of International Trade, Faculty of Commerce, Fukuoka University, 8-19-1 Nanakuma, Jonan-ku, Fukuoka, 814-0180, Japan

    K. Ali Akkemik

  2. Graduate School of East Asian Studies, Yamaguchi University, Yoshida 1677-1, Yamaguchi, 753-8514, Japan

    Jorge Tavares Borges

  3. Department of Tourism Policy, Faculty of Economics, Yamaguchi University, Yoshida 1677-1, Yamaguchi, 753-8514, Japan

    Denes Perlaky

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  1. K. Ali Akkemik
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  2. Jorge Tavares Borges
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  3. Denes Perlaky
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Contributions

KAA: modeling, construction of data, write-up. JTB: literature review, policy overview, simulation design, write-up. DP: conceptualizing the research question, literature review, write-up, proofreading. The final version of the manuscript is authorized by all authors.

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Correspondence to Jorge Tavares Borges.

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Akkemik, K.A., Borges, J.T. & Perlaky, D. Economic impact of tourism in Cabo Verde: a CGE analysis. IJEPS 18, 173–195 (2024). https://doi.org/10.1007/s42495-023-00124-w

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