“Angola's economic outlook remains weak, with three-year recession continuing until 2020,” reads an analysis of Angola's economy and politics, where oil production fell by almost 10% last year and attracting foreign investment remains difficult.
According to the report, which does not detail the forecast of negative economic growth for this and next year, “despite the introduction of numerous tax incentives, it has been difficult to attract international investment to its oil resources in ultra-deep waters, where the price of 'break-even' is higher ”.
The document, sent to customers and to which Lusa had access, forecasts inflation of 17.8% for this year "due to the weakening of kwanza and lower interest rates" and states that "measures to combat inflation will hindered by the exchange rate dynamics, combined with the July cut in electricity subsidies. ”
The latest available data on the Angolan economy's progress registered a recession of 1.2% last year, according to the revision by the National Statistics Institute in late July, which improved the forecast of negative growth of 1.7%, to 1.2% of GDP.
According to the Quarterly National Accounts document for the first three months of this year, the Angolan economy experienced negative growth of 2.5% from January to March 2018, from 3.8% in the second quarter, from 1.3%. in the third quarter and entered positive territory in the last three months of the year, when it registered an economic expansion of 2.6%.
In the first three months of this year, the Angolan economy went back into 'red', registering a contraction of economic activity that INE estimates was 0.4%, which led the executive to review, as early as April, the growth outlook from 3,2% to 0,4% in 2019 as a whole.
In April this year, the Angolan government revised its growth estimate from 3.2% this year, expected at the end of last year, when it signed the financing program with the International Monetary Fund to 0.4%.
At the political level, the EIU predicts that the ruling People's Liberation Movement of Angola (MPLA), the ruling party of João Lourenço, will win next year's elections, “maintaining its dominance at the polls due to strong control of the state apparatus and having the advantage of being in power at national level ”.
The President, predicts the economic analysis unit of the British magazine The Economist, “will try to maintain what he considers to be his position as regional leader, consolidating economic and trade links, continuing to sign agreements with his neighbors, but sentiment protectionist and logistical bottlenecks will continue, hindering potential growth in the medium term. ”
Policy decisions will continue to be determined by efforts to increase the private sector in the economy, diversifying the economy and increasing investment flows, but these efforts will be constrained by the still challenging operating environment, ”analysts conclude, concluding that Even the recently announced privatization program will face difficulties not only because of “logistical difficulties”, but also because of the relative incipience of the Angolan financial sector.