Angola’s economic downturn in 2019 will be only 3.3%, an improvement of 30 basis points compared with the forecast of a rate of minus 3.6% announced by the Economist Intelligence Unit (EIU) report on the country released in October.
On this date, the EIU forecasts for this year pointed to a contraction of 3.6%, slowing to 1.9% in 2020, before returning to positive rates in the following year and achieving growth of 6.2% in 2024, the last year of the period under review.
In its latest report, the EIU still expects economic contraction in 2019 and 2020 but also improves its projection for next year, with a rate of minus 1.3%, an improvement of 60 basis points in relation to the previous forecast.
From 2021 and until 2024, the last year of the period under review, the Angolan economy is expected to return to growth, which will be 2.3% in 2021, 3.2% in 2022, 3.5% in 2023 and 5.9% in 2024, a fall of 30 basis points compared with the previous forecast for the final year of the period.
The document mentions the efforts made by President João Lourenço’s government to increase tax revenues and reduce public spending through the introduction of taxes and the elimination of some subsidies under an agreement signed with the International Monetary Fund (IMF).
The EIU analysts expect that oil sector reforms are may attract new investments through the award of new operating licenses, although tangible results will take years to emerge, with just a small increase in production in 2024.
The EIU’s forecast for inflation is that it will remain high, and should increase to 22.4% in 2020 before beginning to slow as a result of the lower rate of devaluation of the national currency and prices are expected to grow at an average rate of 12.6% in the 2021/2024 period.
The kwanza, which is currently worth 516 kwanzas to every dollar, is expected to continue to depreciate over the period, albeit more slowly, is expected to reach 2024 at a rate of 1/561 to the dollar. (macauhub)