The Economist Intelligence Unit (EIU) has decided to lower its forecast for Angola’s economic growth for this year, according to the latest country report.
The downward review of a previous forecast of a growth of 2.3% is based, according to the report, on the poor performance of the Angolan economy in the first half of the year.
However, economic developments in the 2019/2023 period are expected to be more robust, with an annual growth forecast of 2.9%, provided that oil prices remain relatively high and the Kaombo block begins to produce oil, helping to increase national production.
The EIU also projects an increase both in public expenditure and private consumption, thus generating a circular mechanism of economic growth.
But the report added that efforts to diversify the economy beyond the hydrocarbon sector will continue to be hampered by the difficult business environment.
The EIU recalls that the expected growth rate is about a quarter of the growth levels recorded 10-year period to 2014 and added that the per capita GDP in the period under review will tend to contract.
The document mentions, however, the efforts being made by the current government of João Lourenço, including reduction of bureaucracy and corruption, as well as unfair competition from public companies over private ones, but stressed that many more are needed for “per capita” income to increase.
Lourenço will find the resistance of veiled interests and there is a clear risk that the authorities will give priority to popular measures if the growth of the economy remains anaemic and if this results in people’s disenchantment with the ruling elite, the statement said.
The EIU also predicts that the inflation rate will fall in the 2019/2023 period, and only in 2023 will it fall to a single digit, namely to 9.9%. (macauhub)