Angolan GDP growth in 2006 less than a half of IMF forecast – report

6 January 2006

Luanda, Angola, 6 Jan – Gross domestic product in Angola will increase by 9.2 percent this year, less than a half the rate predicted by the International Monetary Fund, according to the London-based Economist Intelligence Unit (EIU).

Angola’s GDP this year will fall compared to the 14.1 percent registered for 2005 due to stabilization of world oil prices and a more modest expansion in the country’s non-oil sectors, the EIU is cited as saying in the latest report on Angola by Portugal’s BPI financial group.

The IMF predicted last June that Angola’s economy would expand by about 25 percent this year and according to the BPI report, the most reliable GDP forecast should be situated nearer the IMF forecast “due to the number of oil developments beginning production until 2008.”

The IMF’s predictions could be overly optimistic because, despite boosted production capacity in Angola’s lucrative diamond and mining sector in recent years, production levels have remained lower than expected, notes the BPI report.

Additionally, the next oil wells to come into production will produce a lower quality, heavier crude that will sell more cheaply.

The EIU also diverges from the IMF in its inflation forecast for 2006, saying the rate will climb to 26 percent – an increase of 1.2 percent from last year.

Luanda’s budget will show a US$ 2.6 billion surplus, down US$ 700 million on 2005 and exports will increase by 9 percent to a value of US$ 26.3 billion, with imports growing 15 percent to US$ 9.4 billion, according to the EIU.

The Angolan kwanza will continue to rise in value against the US dollar with an average exchange of around 91 kwanzas, says the EIU. (macauhub)