Angola: Economy expected to shrink by 3 pct due to crisis, BPI study says

6 March 2009

Lisbon, Portugal, 6 March – The Angolan economy is expected to shrink by 3.0 percent this year, as compared to a initial government growth projection of 11.8 percent, according to estimated from economists from Portuguese bank BPI in a study published Thursday in Lisbon.

The projections of the office of economic states of BPI are more negative than those of the International Monetary Fund (IMF), which in October forecast growth of 4 percent but later said that there may be no growth, and even the forecasts of contraction of 2.3 percent from the Economic Intelligence Unit (EIU) in January.

The rate of Angolan Gross Domestic Product Growth (GDP) projected by the Government for 2009 was 11.8 percent, which was a slowdown against the 15.6 percent projected for 2008, but due to the international crisis the “authorities have also recognised that it will be lower,” than that projection, the study said.

These indicators are significant for the country’s macroeconomic Outlook and could lead to a review of the figures projected by the Government for 2009, in which oil production grows from 693.6 million barrels per year to 739.7 million, but with export prices falling from US$97.08 to US$55.

BPI’s projections are a slowdown or negative growth of 14 percent for the oil sector and growth of 12 percent for the non-oil sector.

Public expenditure will see negative pressure due to a fall in oil revenues, despite the “surplus revenues of the last few years allowing the authorities to continue with their main investment programmes.”(macauhub)