Lower oil production in Angola offset by growth of non-oil sector

19 September 2014

Lower oil production in Angola will have a smaller impact than expected impact on the country’s public accounts due to “robust growth of the non-oil sector” according to an analysis by the economic studies office of Banco BPI.

In it Monthly Macroeconomic Panorama for September, BPI analysts said the non-oil sector is expected to grow 7.3 percent this year, “anchored mainly in the agricultural sector, which is expected to grow about 11.5 percent,” which should lead to economic growth of 3.9 percent this year and almost 6 percent next year.

In the monthly analysis of the Angolan economy, the Portuguese bank noted that the IMF, which recently carried out an assessment of Angola’s economy, warned of “deterioration of public accounts, predicting a widening of the budget deficit to 4.1 percent this year and 4.2 percent in 2015, compared with a surplus of 0.3 percent of GDP in 2013.”

The slowdown in oil production in Angola in the first half of this year has led to international economic institutions and rating agencies to lower their economic forecasts for Angola, according to Portuguese news agency Lusa.

At the end of August, Moody’s was the only one of the credit rating agencies to project an improvement in Angola’s outlook. Standard & Poor’s and Fitch Ratings considered Angola’s outlook to be stable.

The Economist Intelligence Unit (EIU) expects growth of 4.5 percent in Angola this year, as does BPI, which is more optimistic than the International Monetary Fund (3.9 percent) and more pessimistic than the World Bank, which expects the economy to grow by 5.4 percent. (macauhub/AO)