Angolan central bank “confident” that inflation will remain at 10 pct in 2007

22 June 2007

Luanda, Angola, 22 June – The Angolan central bank has said it is confident that Angola can end 2007 with an inflation rate of 10 percent, but admitted that structural deficiencies in the economy could be an obstacle to that government target.

“We are confident that the measures adopted by the National Bank of Angola (BNA) will contribute to convergence of the inflation rate to 10 percent in 2007 and to one figure in 2008,” said the central bank in reply to a questionnaire sent by Portuguese news agency Lusa.

“Just a few price adjustments, associated to structural issues of the Angolan economy could prevent inflation reaching 10 percent in 2007, but either way it should remain below the 12.2 percent variation of 2006,” said the monetary authority.

“The behaviour of prices in the first quarter of 2007 was not very different to the trajectory that occurred in the first quarter of 2006, which brought up big concerns in terms of meeting the inflation target of 10 percent projected by the government,” the bank explained.

After the BNA’s intervention in the market, the inflation rate maintained the same pattern of increases posted in previous months of the year, in May reaching the highest variation since the beginning of 2007, with a rise of 0.88 percent and a year on year rate of 12.37 percent.

“The Angolan economy is growing in 2007 at rate of over 30 percent, and therefore at a higher rate than in 2006, at around 20 percent in real terms and it is thus natural that there will be occasional inflationary pressures due to excess demand in relation to overall supply,” the bank said. (macauhub)