World Bank expects “difficult challenges” for Angola and Mozambique

12 June 2015

The overall decline in the price of fuel and goods will this year lead to “difficult challenges” to developing countries, such as Mozambique and Angola, which will have more difficulty paying loans, said the World Bank in a report issued this week.

In the update to the annual “Global Economic Outlook – 2015”, the World Bank lowered its growth forecast for the group of developing countries to 4.4 percent, which will have an impact on the world economy, representing a “fourth consecutive year of disappointing growth,” (2.8%).

According to the World Bank, the appreciation of the dollar will hinder payment of foreign debts of countries such as Angola, which will be affected given that it is an oil exporter, and Mozambique, which will benefit from the reduction of its fuel import bill but will be hampered by the lower prices of the goods it exports.

In this context, the World Bank said that the Angolan economy this year would grow by 4.5 percent anticipating a decline of 0.6 points in 2016 (3.9 percent), from which the country may recover in 2017 (5 percent).

Amongst Portuguese-speaking African countries (PALOP), Mozambique is the country that will grow most in 2015, with expansion of gross domestic product (GDP) of 7.2 percent, as well as in the following two years (7.3 percent).

Cabo Verde (Cape Verde) is expected to grow 3 percent this year, 3.4 percent in 2016 and 3.5 percent in 2017, while Guinea-Bissau will see its GDP expand 4.2 percent in 2015 and 3.9 percent and 4 percent in the next two years, the report said making no mention of the economic growth forecast for São Tomé and Príncipe.

Equatorial Guinea, on the other hand, is facing a recession until 2017, when its economy will grow 3.7 percent after a contraction of 3.1 percent in 2015 and 15.4 percent in 2016. (macauhub/AO/CV/GW/MZ/ST)