Angola’s net international reserves declined by US$7.3 billion in one year, the Angolan minister of State for Economic and Social Development said on Thursday in Luanda.
Manuel Nunes Júnior, who presented the economic balance sheet for the third quarter of 2018, said that the drop occurred between December 2016 and December 2017, when net international reserves decreased from US$20.8 billion to US$13.5 billion.
“Foreign reserves currently stand at US$11.6 billion, which represents a decrease of US$1.9 billion since the beginning of this year,” said the minister, quoted by Angolan news agency Angop.
Manuel Nunes Júnior pointed out that the single foreign currency treasury account fell from US$15.86 billion in 2013 to US$6.98 billion in 2017, a reduction of US$8.88 billion due to a sharp drop in revenue which was not accompanied by a proportional reduction of expenditure.
This situation of falling revenues led to systematic budget deficits, financed through domestic and external debt, and the minister said, by way of example, that in 2016 there was a deficit of 3.7% of Gross Domestic Product and the deficit increased to 6.3% in 2017.
With systematic deficits, Angola saw its debt level rise, with public debt shifting from less than 30% of GDP in 2013 to about 79% of GDP in 2017.
To reverse this debt growth scenario, in January 2018 the government approved the Macroeconomic Stabilisation Programme including fiscal measures to reduce the budget deficit from 6.3% in 2017 to 0.4% in 2018, and an expected surplus of 1.5% by 2019. (macauhub)