Portugal and China boost their position as Angola’s main trading partners

14 May 2012

Portugal and China are boosting their position as Angola’s main trading partners, as a time of growing economic activity in Angola and of public and trade surpluses, according to Portugal’s BPI bank.

“In terms of exports the hegemony of oil has increased, and for which China is the most important buyer, whilst on the import side consumer goods dominate and Portugal continues to take pole position, although China has been gaining,” the bank said in its latest report on Angola.

The growth of China’s weight as a destination for Angolan oil exports, which currently stands at almost 45 percent of the total, has been inversely proportionate to exports to the United States, which is now less than 20 percent of the total.

In terms of imports, China is placed second, with a share of less than 10 percent, ahead of the United States and Brazil, whilst Portugal tops the list with 15 percent.

“There is evidence of consolidation in the positions of Portugal and China and the main trading partners,” BPI said in its May report.

Driven by good performance of oil prices, which offset a drop in production, Angola’s foreign accounts have a surplus of over 8 percent of GDP and its balance of trade has a clear surplus.

“The continuing vigour of the mining sector along with levels of domestic demand adjusted to income ensures surpluses in public and foreign accounts and over the next few years the Angolan government will enjoy budgetary leeway,” BPI said.

This situation makes it possible to, “gradually execute the programme of public investments favouring a healthy absorption by the economy, of high incomes provided by the extractive industry,” it said.

The increase in oil revenues has also allowed Angola in the last few months to replace its international reserves to levels above US$25 billion, which in 2009 and 2010 stood at between US$10 billion and US$15 billion.

According to the Portuguese bank’s calculations, which in Angola is the main shareholder of Banco Fomento, the Angolan economy in 2011 grew by over 3 percent and in 2012 is expected to see, “notable acceleration of economic expansion,” to close to 10 percent, “benefitting from the start of production of new oil wells and increased exploration of natural gas.”

The trend over the following few years will be of a downturn, to 7.5 percent in 2013, and 5.4 percent in 2014.

The International Monetary Fund (IMF) expects Angola to post growth of 9.7 percent this year, which is lower than the 12.8 percent forecast in the Angolan State Budget, and of 6.8 percent in 2013.

Also according to BPI, inflation this year may finally fall to the long-awaited single-figure level though close to 10 percent.

Inflation has particularly slowed since the end of 2011, favouring the policy of low interest rates implemented by the authorities when selling public debt. (macauhub)