Angola: Rise in oil prices “relieves pressure” on budget

27 May 2009

Lisbon, Portugal, 27 May – The recent rise in oil price “relives pressure” on the Angolan state budget, but, even with oil at an average price per barrel of US$50, Luanda will lose over US$8.5 billion in revenues, Portuguese bank BPI said.

The projections from BPI’s office for Economica nd Financial Studies are part of the bank’s regular report on the Angolan economy, which was published Monday in Lisbon.

After falling to close to US$33 per barrel this year, a barrel of oil on the US market is currently being bought at around US$60.

“Considering that over the next few months the upward trend in the international price of oil will continue, it may make sense to consider that in the second half of the year the benchmark price for Angolan oil will be around US$55,” as outlined in the 2009 State Budget, BPI’s economists said.

The bank’s calculations take into account the values of oil revenues written in the state budget for this year and production levels close to 1.7 million barrels per day.

Amongst the main measures to respond to an economic slowdown, the Angolan government plans to reduce expenditure on goods and services, ensure minimum required expenses for public institutions and apply more dynamism to financial restructuring of strategic public companies.

The World Bank, International Monetary Fund (IMF) and the OECD all project that Angolan will see its economy contract significantly this year, but return to growth in 2010 (9 to 10 percent).

The OECD is the most pessimistic (minus 7.2 percent) and teh IMF the most optimistic (minus 3.6 percent). (macauhub)