Angola’s economic growth is expected to increase to 1.25% in 2017, after no growth in 2016, reflecting the recovery of the non-oil sector, according to a report issued on Wednesday in Washington by the International Monetary Fund (IMF).

The same report, which presents the results of the 2016 mission under Article 4, said that the inflation rate is expected to increase until the end of the year to 45%, before declining to a 20% rate in 2017, as a result the application of tighter monetary conditions and a stable national currency.

“The medium-term prospects are for a gradual recovery in economic activity, although there are risks, including a further decline in oil prices and delays in the implementation of structural reforms needed to promote economic diversification,” the report said.

The IMF mission led by economist Ricardo Velloso said that despite the measures taken to mitigate the impact of the decline in oil prices, which allowed significant improvement in the primary non-oil fiscal balance and devaluation of the kwanza against the dollar, “additional measures are necessary to continue adjusting to the new reality of international oil markets.”

The document stated that the government’s actions to control public spending partially offset the impact of lower oil prices, and the overall fiscal deficit is expected to be about 4.0% of GDP in 2016.

“However, public debt is expected to exceed 70% of GDP at the end of 2016, reflecting the depreciation of the exchange rate beyond the projected fiscal deficit,” the report said, with IMF staff calling for the Angolan government to seek a fiscal deficit of no more than 2.25% of GDP in 2017. (macauhub)