Angola’s economy is expected to post growth of 5.2 percent this year, just over half the official government forecast, which predicted the economy would expand by 9.7 percent, according to unit of Economic and Financial Studies unit of Portuguese bank BPI.
In the extended January study of Angola’s economy, the BPI analysts predict that Angola’s economy will generate more than a third of its tax revenues from the non-oil sector.
The study projects that Angola ended 2014 with a public deficit of 0.2 percent, down from the 4.9 percent of GDP initially forecast, but the BPI explains that “the drop in the deficit compared to what was expected is the result of poor budget execution, as the drop in expenditure should be greater than the drop in tax revenue.”
BPI adds that “revenue from oil taxes, with a weight of 70 percent in total tax revenue, is expected to fall about 17 percent against 2013, reflecting the impact of revenue shortfalls in the sector, which in the first half the year were affected by a drop in production and in the second half by falling prices.”
Analysts from the Portuguese bank expect that a reduction on the expenditure side will be even more pronounced, estimating a drop of 10 percent of total expenditure compared to 2013 and 19 percent compared to the budget for 2014.
The Economist Intelligence Unit, in turn, has lowered its growth forecast for Angola, now forecasting the economy to grow just 3.9 percent this year, down from an initial forecast of 4.4 percent, mainly due to oil prices .
In the statement the EIU analysts also said “oil production is expected to rise to 1.85 million barrels per day in 2015,” and estimated that “an acceleration in the pace of production and moderation in the increase in oil prices will increase GDP growth to 5.7 percent in 2016, ending the decade with an average of 6.3 percent between 2017 and 2019.
The State Budget for 2015 forecasts economic growth of 9.7 percent, an average price per barrel of crude oil of US$81 and annual oil production of 669.1 million barrels, but is being revised taking into account oil prices to levels of around US$40. (macauhub/AO)