Angola’s economy, which will continue to depend on the oil industry, is expected to grow 1.9% this year, after contracting 0.7% in 2018, according to the Economist Intelligence Unit (EIU).
The latest EIU report on Angola forecasts an average economic growth of 2.6% per year for the 2019-2023 period, which compares with an average rate of 1.4% for the period from 2014 to 2018.
Part of the growth of the Angolan economy is expected to be due to the beginning of the exploration of the Kaombo oil field, combined with an increase in public spending and household and corporate consumption.
Mentioning the need to introduce structural reforms, the document noted that the country’s political elite has historically opposed such changes, but added that there was a “greater than anticipated appetite” by the current President of the Republic to make significant changes.
The report added that the appreciation of the dollar, combined with weak investor sentiment in relation to emerging markets, as well as the country’s own economic scenario, will continue to weigh on the Angolan currency, the kwanza, which should continue to depreciate against the main currencies until 2023.
The rate of inflation, which rose in 2018 due to currency devaluation, is expected to remain high over the period under review, precisely because of the weakness shown by the Kwanza.
The budget deficit is expected to be negative from 2019, with 1.5% of gross domestic product down until 2023, at 2.6%.
Gross fixed capital formation,or investment, is expected to remain at low levels, ranging from a maximum of 4.8% in 2019 to a low of 3.7% in 2021.