IMF projects lower rate of economic growth for Angola than government

20 March 2014

Angola’s economy is expected to post growth of 5.3 percent in 2014 according to the International Monetary Fund (IMF) whose projection is lower by 3 percentage points than the 8.8 percent forecast by the Angolan government.

According to a statement issued Tuesday in Washington No the IMF is concerned about Angola’s return to a budget deficit and calls for an end to fuel subsidies proposing they be replaced with “transfers focused on more vulnerable sectors.”

The IMF forecasts that, given low budget execution in 2013, the rate of GDP growth for that year will be 4.1 percent, which is lower than the 5.1 percent projected by the government.

The lack of meeting domestic commitments, particularly delays in domestic payments in 2010 and expected payments in 2011 are a “disappointment” to the IMF, which noted that Angola’s legal system was one of the factors leading to that situation.

Noting a “continued improvement in the primary non-oil deficit,” the IMF noted the importance of driving domestic resources, particularly non-oil revenues, and warned against “a permanent rise” in public expenditure that is not in line with a broadening of the non-oil tax base in order to prevent debt build up.

On a positive note the IMF’s statement said that Angola had maintained single-digit inflation, increased its foreign reserve and improved exchange rate stability. (macauhub)