Angola’s currency, the kwanza, is expected to continue to depreciate against the main currencies – the euro and the dollar – given the sharp difference between the exchange rate at the auctions organised by the National Bank of Angola and the parallel market, according to the Economist Intelligence Unit (EIU).
The EIU said in its latest report on Angola that the devaluation of the kwanza, which has already lost a quarter of its value against the dollar since the beginning of the year, will have the immediate consequence of keeping the rate of inflation high in the first half of the year (2018/2022) and to remain at a two-digit level until 2021.
The growth of the country’s economy will continue to depend on the price of oil, given reduced efforts to diversify the economy, with the EIU projecting that Angola’s Gross Domestic Product (GDP) will grow at an average rate of 2.5% per year to 2022, which compares with the rate of 4.7% recorded in the period from 2011 to 2015.
Angola’s economy is expected to grow by just 1.7% this year and increase in the following years to 2.4% in 2019 and 3.0% in 2022.
The projected growth of 1.7% for 2018 is due to the fact that the depreciation of the currency and its consequent impact on prices should have a negative effect on consumption of households, companies and the State. (macauhub)