September 25, 2023

Angola’s economic growth expected to be “modestly positive” in 2022 as non-oil sectors continue to recover and oil production stabilizes, IMF says  

Angola’s president, João Lourenço
Angola’s president, João Lourenço

The Angolan economic growth is expected to be “modestly positive” in 2022 as non-oil sectors continue to recover and oil production stabilizes, the International Monetary Fund (IMF) said on Thursday, asserting that the recovery that began in 2021 is expected to continue this year.

The multilateral lender said high oil prices and strong non-oil revenues are estimated to have yielded a substantial overall fiscal surplus 2021. High oil prices have also led to a large current account surplus, a stronger exchange rate, and adequate international reserves.

Angola’s non-oil sector began growing last year while oil production fell. Non-oil GDP averaged 5.2 percent growth through the first three quarters of 2021.

“Inflation, driven by high global food prices, has been around 27 percent y/y since October.  The central bank has maintained tight monetary conditions in response, and the government has taken some steps to facilitate food imports. Inflation is expected to gradually ease over the course of 2022 in line with an expected easing of global food prices,” an IMF spokesperson told told Today News Africa in Washington DC. The spokesperson added that with still-high debt levels, fiscal policy will remain tight. 

“The authorities’ responsible fiscal policies together with earlier debt reprofiling have helped preserve debt sustainability and enabled the allocation of resources to fight the economic and health crises. Going forward, key debt indicators, such as debt-to-GDP ratio, will improve rapidly, although vulnerabilities will remain,” said the spokesperson.

“The IMF supported the authorities’ economic reforms through a three-year EFF extended arrangement; this program concluded successfully – despite many challenges, including COVID-related shocks – with the completion of the sixth and final review on December 22, 2021. The authorities have stated publicly that they are not currently considering requesting a follow-up Fund program.

“Key reforms going forward are focused on maintaining the fiscal stance that reduces debt vulnerabilities and diversifying the Angolan economy away from oil dependency by pursuing broad-based reforms to strengthen governance, improve the business environment, and promote private investment. In parallel, the authorities are strengthening their monetary policy framework to address inflationary pressures,” the spokesperson said.

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