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### Executive summary and context
- The Executive Board concluded the Post-Financing Assessment (PFA) with Angola; the authorities consented to publication of the Staff Report.
- Context and triggers:
  - Angola’s 2024 outturn was stronger than anticipated, but volatility in oil prices, oil production, and sovereign spreads in the first half of 2025 has amplified medium-term risks.
  - The IMF provided financial support (SDR 3.2 billion) under the 2018–21 Extended Fund Facility (EFF); outstanding credit to the IMF amounted to SDR 2.9 billion (392 percent of quota) at end-December 2024, triggering the PFA.

### Recent economic performance and near-term outlook
- 2024 highlights:
  - Real GDP growth: 4.4 percent (2024).
  - Current account surplus: 5.4 percent of GDP (2024).
  - Gross international reserves: $15.8 billion (7.7 months of import cover).
  - Inflation: peaked at 31.1 percent (July 2024); 22.3 percent (April 2025); 19.5 percent (July 2025).
  - Public debt-to-GDP ratio: 60 percent (2024).
- Near-term deterioration and risks (first half 2025):
  - Decline in oil revenues and tightening external financing conditions.
  - Overall fiscal deficit projected to widen to -2.8 percent of GDP (2025) from -1.0 percent (2024).
  - Sovereign bond yields spiked above 15 percent (April 2025).
  - External financing pressures and sizable maturing external debt heighten near-term financing pressures.
- Outlook and projections (staff baseline):
  - Real GDP growth: 2.1 (2025 proj.); 2.1 (2026 proj.); medium-term recovery around 3 percent (staff also cites 3.1 percent contingent on diversification).
  - Inflation trajectory: projected to decline gradually toward single-digit over the medium term, with risks from trade disruptions, premature monetary easing, and exchange rate pressures.
  - Key sector projections:
    - Oil sector real growth: 2.8 (2024); -2.0 (2025 proj.); 0.0 (2026 proj.).
    - Non-oil sector real growth: 4.7 (2024); 2.9 (2025 proj.); 2.5 (2026 proj.).

### Executive Board assessment and policy guidance
- Directors welcomed stronger-than-expected 2024 performance but noted intensified vulnerabilities from oil price declines and oil production challenges.
- Fiscal policy guidance:
  - Rationalize expenditures to preserve fiscal space.
  - Advance fuel subsidy reform (delayed to 2028 in authorities’ plan) while protecting the most vulnerable and deploying a strong communication strategy.
  - Continue non-oil revenue mobilization and accelerate Public Financial Management (PFM) reforms to enhance fiscal transparency, prevent arrears, and improve spending efficiency.
  - Smooth debt repayments, prioritize low-cost financing, avoid excessive reliance on short-term costly financing and collateralized debt instruments, mobilize donor financing, and accelerate privatization to meet near-term needs.
- Monetary and exchange rate guidance:
  - Allow the exchange rate to serve as a key shock absorber with limited rules-based FX interventions.
  - Avoid premature monetary easing to sustain disinflation and anchor inflation expectations.
  - Banco Nacional de Angola (BNA) should strengthen monetary policy effectiveness and closely supervise systemic risks, including the sovereign-bank nexus.
- Financial sector guidance:
  - Strengthen financial stability framework, enhance safety nets, support credit intermediation, complete the 2025 Financial System Assessment Program (FSAP), strengthen AML/CFT framework, and exit the FATF grey list.
- Structural policy guidance:
  - Improve business climate and governance, pursue market-friendly horizontal policies, streamline business regulations, liberalize the economy, and prioritize import substitution measures to promote non-oil growth.

### Fiscal policy — key findings, mechanics, and authorities’ plan
- 2024 fiscal outturn:
  - Overall fiscal deficit: -1.0 percent of GDP (2024).
  - Non-oil primary deficit: -6.1 percent of GDP (2024), slipped by 0.4 ppts relative to A4.
  - Current spending exceeded projections more than non-oil revenue gains.
- Baseline revisions and drivers:
  - Overall deficit projected: -2.8 percent of GDP (2025 proj.); -3.0 percent of GDP (2026 proj.).
  - Delay in fuel subsidy reform completion from end-2025 (A4 assumption) to 2028.
  - Fuel subsidy expenditure: 2.7 percent of GDP (2024) → 1.3 percent of GDP (2025) (Text Table 1).
  - Savings from fuel subsidy reform in 2025 relative to 2024: estimated at 1.4 ppts of GDP in the baseline (vs 1.7 percent in A4).
    - In H1 2025, diesel subsidies reduced from 70 percent to 56 percent of the reference price; estimated savings ≈ 0.3 percent of GDP.
    - Staff baseline assumes fuel subsidy reductions of about 0.7 percent of GDP for the full year in 2025 with subsequent measures.
  - From 2025, fuel subsidies recorded on a net basis to account for Sonangol’s oil tax receivables used to cover fuel subsidy costs.
- Authorities’ planned 2025 measures:
  - Close about half of the emerging fiscal financing gap with a spending freeze and the rest with additional external financing.
  - Plan to freeze spending by about 0.6 ppt of GDP in 2025 to contain the fiscal deficit to 2.2 percent of GDP and secure additional financing of about 0.9 ppts of GDP.
  - Spending freeze to include: (i) capital projects with low execution rates; (ii) non-essential goods and services; (iii) further restraining subsidy payables.
- Fiscal transparency and PFM:
  - Begin publishing quarterly fiscal reports under the 2014 GFSM starting August 2025.
  - First EITI validation concluded June 2025; Angola required to address 25 corrective actions before next validation in April 2028.
  - Fiscal risk statement to be published as an annex to the draft 2026 budget in October 2025.
  - Five-year mandated review of the Fiscal Sustainability Law (FSL) scheduled for Fall 2025.
- Near-term financing pressures:
  - External debt service due in 2025: US$10.5 billion (9.1 percent of GDP) — equivalent to oil tax revenue (8.6 percent of GDP).
  - Authorities’ 2025 financing strategy includes borrowing from multilateral and commercial creditors; part of external debt service expected to be financed through domestic market issuance.
  - Multilateral borrowing includes committed project loans of US$4 billion.
  - Long-term yields on Kwanza-denominated debt easing but remain elevated; market capacity to absorb rapid issuances uncertain.
- Staff-identified fiscal gap and recommendations:
  - Potential fiscal financing gap: 1.5–2.0 percent of GDP annually for 2025–27.
  - Staff recommends upfront fiscal adjustment, mobilization of low-cost donor financing starting in 2025, and greater exchange rate flexibility to buffer oil revenue volatility.
  - Staff welcomes the planned expenditure freeze and recommends prompt implementation.
  - Staff cautioned against:
    - Excessive domestic borrowing (risks: increased bank sovereign exposure, depreciation-inflation spiral, crowding out private credit).
    - Costly short-term external debt with complex collateralized terms (risks: onerous debt service, undermined investor confidence).
  - Debt management should prioritize low-cost financing, mobilize donor support, and smooth debt service.

### Monetary and financial sector — stance, soundness, and reforms
- Monetary stance and inflation:
  - BNA maintained tight monetary policy; improved policy transmission aided disinflation.
  - Staff assesses current monetary policy stance as mildly tight based on expected 12-month-ahead inflation.
  - Short-term real neutral rate: 2.5–3.5 percent; current real policy rate: 3.5–4.5 percent.
  - Staff advises against premature monetary easing; delay easing until inflation consistently falls below the policy rate, projected to occur by end-2025.
  - Priorities: improve monetary policy implementation framework, streamline liquidity management, and central bank operations.
- Financial system resilience and reforms:
  - System-level liquidity and capital buffers are above minimum regulatory requirements but uneven across institutions.
  - Some financial soundness indicators worsened: elevated NPLs and pressures on capital adequacy; a longstanding problem bank unresolved despite resolution measures under consideration (Feb 2025 signals).
  - Limited progress on reforms to improve financial intermediation; ongoing FSAP to examine stability and safety net.
- AML/CFT progress:
  - Steps taken toward exiting the FATF grey list; first progress report submitted for June 2025 FATF plenary.
  - Measures include strengthening risk-based supervision (especially non-banks), enforcing access to beneficial ownership information, and strengthening enforcement through investigations, prosecutions, and targeted financial sanctions.
  - Angola included in the EU high-risk third country jurisdiction for AML/CFT deficiencies in June 2025; no noticeable impact on correspondent banking relationships to date.
- Financial stability recommendations:
  - Monitor systemic risks including banks’ exposure to government debt and FX-related risks.
  - Enhance supervision of FX exposures; expand and diversify financial sector assets and investor base.
  - Operationalize the financial safety net and newly established resolution function; build crisis management capabilities.
  - Prioritize refinement of resolution plans for weak and systemically important banks.
  - Implement the FATF Action Plan to ensure timely exit from the FATF grey list.

### External sector, reserves, and exchange rate policy
- 2024–2025 balance of payments:
  - Current account surplus ended 2024 stronger than anticipated by 1.3 percent of GDP.
  - Preliminary financial account net outflows: 3.7 percent of GDP (revision from 3.5 percent in A4).
- Projections and reserves:
  - Current account surplus: 0.9 percent of GDP (2025 proj.); 0.5 percent of GDP (2026 proj.).
  - Gross international reserves projected: US$14.3 billion (end-2025), 90 percent of Adequacy of Reserve Assessment (ARA).
  - GIR series: 15,768 (2024); 14,268 (2025 proj.); 12,668 (2026 proj.) [selected table entries preserved].
- Exchange rate and FX policy:
  - Exchange rate flexibility improved H1 2024; stability since October 2024.
  - Authorities noted stability driven by market dynamics; BNA intervenes mainly during FX shortages for imports.
  - Policy guidance: maintain exchange rate as shock absorber; FX interventions judicious and rules-based; reduce market concentration; improve price discovery; calibrate FX intervention rules to safeguard reserves and avoid delaying exchange rate adjustment to fundamentals.

### Structural issues, diversification, and governance
- Oil dependence:
  - Oil accounts for 60 percent of fiscal revenue and 94 percent of exports.
- Diversification efforts and risks:
  - Import substitution measures (e.g., licensing for agricultural products) have been emphasized, but risk limiting access to cheaper imports, increasing prices, reducing competition, and accentuating rent-seeking.
  - Staff recommends broad-based horizontal reforms: governance, streamlining business regulations, liberalizing the economy.
- Authorities’ stance:
  - Authorities optimistic relative to staff on oil production and growth; highlight import substitution, potential in agriculture, forestry, fisheries, manufacturing, and services to drive non-oil growth.
  - Example: tightening import licensing for meat and poultry products in early 2025.
- Priority structural actions:
  - Improve business climate, mobilize development financing, pursue prudent borrowing practices, and advance horizontal policies to promote non-oil growth under the NDP and AU Agenda 2063.

### Capacity to repay and risk scenarios
- Assessment:
  - Angola’s capacity to repay the Fund assessed as adequate but subject to increased risks since last year’s PFA.
- IMF credit and repayment metrics:
  - Outstanding IMF credit: SDR 2.8 billion (US$3.8 billion, 384 percent of quota, 27 percent of GIR) in March 2025.
  - IMF credit outstanding will peak in 2025 at 2.9 percent of GDP and 23.6 percent of gross international reserves.
  - Repayments to the IMF in nominal terms projected to peak in 2026 at US$863 million (2.8 percent of exports).
  - Repayments as a share of GIR peak at 7.0 percent (2027) in the baseline, then decline and conclude by end-2031 under the baseline.
- Main risk factors:
  - International oil prices (baseline assumes decline in line with WEO; sharper drop would weaken positions).
  - Delays in fiscal adjustment (loss of consolidation could widen deficits, increase debt issuance, intensify cash-flow/liquidity risks).
  - Premature monetary easing (could jeopardize disinflation, raise domestic borrowing costs, crowd out private credit).
  - Limited capital inflows and FX liquidity pressures given large FX debt repayments during 2025–27.
- Staff mitigation priorities:
  - Limit erosion of fiscal and external buffers; prudently manage public debt; strengthen investor relations; promote diversification; pre-emptive fiscal mitigation measures; maintain exchange rate flexibility and continued monetary tightening; reprioritize spending to protect social expenditures; adjust non-oil fiscal balance by around 1–1.5 percent of GDP by 2026 under adverse conditions; enhance financial sector monitoring; mobilize development partner support; implement anti-corruption and rule-of-law reforms.
- Downside scenario specifics:
  - Assumes oil prices and production fall below $50 dollars per barrel and below 1 million barrel per day, respectively, in the near term.
  - Under downside: IMF repayments as share of GIR peak at 8.3 percent (2027) and as share of exports peak at 3.0 percent (2026) — compared to 7.0 and 2.8 percent in the baseline.
  - Prompt and credible policy adjustments are emphasized under the downside scenario to avoid disorderly macroeconomic adjustment.

### Annex I — Downside Scenario (description and quantitative impacts)
- Scenario assumptions:
  - Brent oil prices decline to US$50 per barrel starting H2 2025.
  - Domestic oil production falls to average of 1 million barrels per day in 2026.
  - Gradual recovery in prices and production over the medium term; shock largely resolved by end-2030.
- Macroeconomic spillovers:
  - Higher risk premiums, FX liquidity risks, exchange rate and domestic interest rate pressures.
  - Growth stalls from declining oil production and abrupt fiscal adjustment; heavy domestic borrowing crowds out private credit.
  - Fiscal contraction: reduced oil and non-oil tax bases; exchange rate flexibility cushions but increases public debt via FX revaluation.
- Key quantitative downside vs baseline impacts:
  - GIR: decline to around 50 percent of ARA (vs about 90 percent under baseline).
  - IMF credit outstanding relative to GIR: rise to 24 percent (2026) vs 21 percent baseline.
  - Repayments to IMF: peak in 2026 reaching 7.8 percent of GIR (instead of 6.8 percent baseline) and 3.0 percent of exports (instead of 2.8 percent baseline).
  - Public debt: rise by nearly 30 ppts of GDP over next two years, peaking at 91 percent of GDP before stabilizing.
  - Fiscal deficit: widen by an average of 2 ppt of GDP over the projection horizon.
  - Total debt interest-to-revenue ratio: reach 31 percent.
  - Exchange rate: depreciation assumed, providing partial buffer but increasing public debt via FX revaluation.
- Modeling and note:
  - Projections based on staff assumptions consistent with the macro framework; scenario illustrative and not an assessment of likelihood; informed by staff macro model and SIP paper, 2023 Angola Article IV consultation.

### Selected key statistics (selected indicators and projections preserved exactly)
- Real gross domestic product: 4.4 (2024); 2.1 (2025 proj.); 2.1 (2026 proj.)
- Oil sector real growth: 2.8 (2024); -2.0 (2025 proj.); 0.0 (2026 proj.)
- Non-oil sector real growth: 4.7 (2024); 2.9 (2025 proj.); 2.5 (2026 proj.)
- Nominal GDP growth: 30.1 (2024); 23.1 (2025 proj.); 21.6 (2026 proj.)
- GDP deflator: 24.6 (2024); 20.5 (2025 proj.); 19.1 (2026 proj.)
- Consumer prices (annual average): 28.2 (2024); 21.6 (2025 proj.); 16.3 (2026 proj.)
- Consumer prices (end of period): 27.5 (2024); 20.0 (2025 proj.); 13.4 (2026 proj.)
- Total revenue (percent of GDP): 17.4 (2024); 15.6 (2025 proj.); 15.4 (2026 proj.)
  - Oil-related: 10.4 (2024); 8.6 (2025 proj.); 8.4 (2026 proj.)
  - Non-oil tax: 6.2 (2024); 6.1 (2025 proj.); 6.1 (2026 proj.)
- Total expenditure (percent of GDP): 18.4 (2024); 18.3 (2025 proj.); 18.4 (2026 proj.)
- Overall fiscal balance (percent of GDP): -1.0 (2024); -2.8 (2025 proj.); -3.0 (2026 proj.)
- Non-oil primary fiscal balance (percent of GDP): -6.1 (2024); -6.8 (2025 proj.); -6.6 (2026 proj.)
- Broad money (M2) end-period percent change: 5.0 (2024); 23.1 (2025 proj.); 21.6 (2026 proj.)
- Trade balance (percent of GDP): 19.6 (2024); 14.6 (2025 proj.); 14.4 (2026 proj.)
- Exports of goods, f.o.b. (percent of GDP): 31.9 (2024); 28.0 (2025 proj.); 28.2 (2026 proj.)
  - Oil and gas exports (percent of GDP): 29.9 (2024); 25.6 (2025 proj.); 25.4 (2026 proj.)
- Imports of goods, f.o.b. (percent of GDP): 12.3 (2024); 13.4 (2025 proj.); 13.8 (2026 proj.)
- Terms of trade (percent change): -2.2 (2024); -12.9 (2025 proj.); -6.3 (2026 proj.)
- Current account balance (percent of GDP): 5.4 (2024); 0.9 (2025 proj.); 0.5 (2026 proj.)
- Gross international reserves (end of period, millions of U.S. dollars): 15,768 (2024); 14,268 (2025 proj.); 12,668 (2026 proj.)
- Gross international reserves (months of next year's imports): 7.7 (2024); 7.1 (2025 proj.); 6.2 (2026 proj.)
- Public sector debt (gross, percent of GDP): 59.9 (2024); 62.4 (2025 proj.); 63.2 (2026 proj.)
  - Central Government debt: 57.6 (2024); 58.7 (2025 proj.); 59.4 (2026 proj.)
- Oil production (millions of barrels per day): 1.10 (2024); 1.08 (2025 proj.); 1.08 (2026 proj.)
- Oil and gas exports (billions of U.S. dollars): 34.5 (2024); 29.4 (2025 proj.); 27.9 (2026 proj.)
- Angola oil price (average, U.S. dollars per barrel): 78.5 (2024); 66.6 (2025 proj.); 62.2 (2026 proj.)
- Brent oil price (average, U.S. dollars per barrel): 79.9 (2024); 67.7 (2025 proj.); 63.3 (2026 proj.)

### Staff appraisal and next steps
- Staff and Directors support continued engagement with the Fund and emphasize:
  - Prompt policy adjustments, prudent debt management, advancing structural reforms, mobilizing non-oil revenue, and strengthening financial stability and AML/CFT frameworks.
  - Completion of the 2025 Financial System Assessment Program and further IMF technical assistance on revenue mobilization and PFM are encouraged.
- Policy priorities summarized:
  - Proceed with planned spending freeze and upfront fiscal adjustment.
  - Rationalize expenditure, contain borrowing for current spending, smooth debt repayments, prioritize low-cost financing, mobilize donor support, advance privatization, and strengthen PFM to avoid arrears.
  - Maintain exchange rate flexibility, avoid premature monetary easing, and closely supervise systemic financial risks.

*Source: IMF staff report and Executive Board discussions, Angola Post-Financing Assessment (July 24, 2025).*

### 4.4 percent. However, Angola faced a decline in oil revenues and tightening external

### ANGOLA: POST-FINANCING ASSESSMENT DISCUSSIONS

### Executive summary and context
- The Executive Board of the International Monetary Fund concluded the Post-Financing Assessment (PFA) with Angola; the authorities consented to the publication of the Staff Report.
- Context: Angola’s 2024 outturn was stronger than anticipated, but volatility in oil prices, oil production, and sovereign spreads in the first half of 2025 has amplified risks to the medium-term growth agenda.
- The IMF provided financial support (SDR 3.2 billion) under the 2018–21 Extended Fund Facility (EFF); outstanding credit to the IMF amounted to SDR 2.9 billion (392 percent of quota) at end-December 2024, triggering the PFA.

### Recent economic performance and outlook
- 2024 performance highlights:
  - Real GDP growth reached 4.4 percent in 2024.
  - Current account surplus rose to 5.4 percent of GDP in 2024.
  - Gross international reserves increased to $15.8 billion (equivalent to 7.7 months of import cover).
  - Inflation peaked at 31.1 percent in July 2024 and was 19.5 percent in July 2025; inflation remained elevated at 22.3 percent in April 2025 (driven by food and nonalcoholic beverages).
  - The public debt-to-GDP ratio fell to 60 percent in 2024.
- Near-term deterioration and risks:
  - Angola faced a decline in oil revenues and tightening external financing conditions in the first half of 2025.
  - Fiscal position is projected to deteriorate: overall fiscal deficit projected to widen to -2.8 percent of GDP in 2025 from -1.0 percent in 2024.
  - Sovereign bond yields spiked above 15 percent in April 2025.
  - External financing pressures and sizable maturing external debt elevate near-term financing pressures.
- Outlook and projections:
  - Growth projected to slow to 2.1 percent in 2025 and 2.1 percent in 2026 (baseline).
  - Medium-term growth projected to recover to around 3 percent (staff also cites a medium-term projection of 3.1 percent contingent on diversification efforts).
  - Inflation projected to continue declining gradually toward single-digit over the medium term, with risks from trade disruptions, premature monetary easing, and exchange rate pressures.

### Executive Board assessment and policy guidance
- Directors welcomed stronger-than-expected 2024 performance but noted intensified vulnerabilities due to oil price declines and oil production challenges.
- Key policy guidance and priorities:
  - Fiscal: Rationalize expenditures to preserve fiscal space; advance fuel subsidy reform (delayed to 2028, but importance emphasized), protect the most vulnerable, and deploy a strong communication strategy.
  - Revenue mobilization: Continue progress in non-oil revenue mobilization and accelerate Public Financial Management reforms to enhance fiscal transparency, prevent arrears accumulation, and improve spending efficiency.
  - Debt management: Smooth debt repayments, prioritize low-cost financing options, avoid excessive reliance on short-term, costly financing, and caution against collateralized debt instruments; mobilize donor financing for development spending; accelerate privatization agenda to meet near-term financing needs.
  - Monetary and exchange rate policy: Allow the exchange rate to serve as a key shock absorber with limited rules-based FX interventions; avoid premature monetary easing to sustain disinflation and anchor inflation expectations; Banco Nacional de Angola (BNA) should strengthen monetary policy effectiveness and closely supervise systemic risks, including the sovereign-bank nexus.
  - Financial sector: Strengthen financial stability framework, enhance safety nets, support credit intermediation, and complete the 2025 Financial System Assessment Program; strengthen AML/CFT framework and exit the FATF grey list.
  - Structural reforms: Improve business climate and governance, pursue market-friendly horizontal policies, streamline business regulations, liberalize the economy, and prioritize import substitution measures to promote non-oil growth.

### Capacity to repay and risk scenarios
- Assessment: Angola’s capacity to repay the Fund is assessed as adequate but subject to risks; risks have increased since last year.
- Downside/adverse scenario: Persistent oil production challenges and intensified oil price pressures would weaken repayment indicators and further elevate risks to capacity to repay.
- Staff and Directors emphasize prompt and credible policy adjustments to mitigate emerging risks, safeguard macroeconomic stability, and strengthen debt sustainability.

### Key statistics (selected indicators)
- Real gross domestic product: 4.4 (2024); 2.1 (2025 proj.); 2.1 (2026 proj.)
- Oil sector real growth: 2.8 (2024); -2.0 (2025 proj.); 0.0 (2026 proj.)
- Non-oil sector real growth: 4.7 (2024); 2.9 (2025 proj.); 2.5 (2026 proj.)
- Nominal GDP growth: 30.1 (2024); 23.1 (2025 proj.); 21.6 (2026 proj.)
- GDP deflator: 24.6 (2024); 20.5 (2025 proj.); 19.1 (2026 proj.)
- Consumer prices (annual average): 28.2 (2024); 21.6 (2025 proj.); 16.3 (2026 proj.)
- Consumer prices (end of period): 27.5 (2024); 20.0 (2025 proj.); 13.4 (2026 proj.)
- Total revenue (percent of GDP): 17.4 (2024); 15.6 (2025 proj.); 15.4 (2026 proj.)
  - Of which: Oil-related: 10.4 (2024); 8.6 (2025 proj.); 8.4 (2026 proj.)
  - Of which: Non-oil tax: 6.2 (2024); 6.1 (2025 proj.); 6.1 (2026 proj.)
- Total expenditure (percent of GDP): 18.4 (2024); 18.3 (2025 proj.); 18.4 (2026 proj.)
- Overall fiscal balance (percent of GDP): -1.0 (2024); -2.8 (2025 proj.); -3.0 (2026 proj.)
- Non-oil primary fiscal balance (percent of GDP): -6.1 (2024); -6.8 (2025 proj.); -6.6 (2026 proj.)
- Broad money (M2) end-period percent change: 5.0 (2024); 23.1 (2025 proj.); 21.6 (2026 proj.)
- Trade balance (percent of GDP): 19.6 (2024); 14.6 (2025 proj.); 14.4 (2026 proj.)
- Exports of goods, f.o.b. (percent of GDP): 31.9 (2024); 28.0 (2025 proj.); 28.2 (2026 proj.)
  - Of which: Oil and gas exports (percent of GDP): 29.9 (2024); 25.6 (2025 proj.); 25.4 (2026 proj.)
- Imports of goods, f.o.b. (percent of GDP): 12.3 (2024); 13.4 (2025 proj.); 13.8 (2026 proj.)
- Terms of trade (percent change): -2.2 (2024); -12.9 (2025 proj.); -6.3 (2026 proj.)
- Current account balance (percent of GDP): 5.4 (2024); 0.9 (2025 proj.); 0.5 (2026 proj.)
- Gross international reserves (end of period, millions of U.S. dollars): 15,768 (2024); 14,268 (2025 proj.); 12,668 (2026 proj.)
- Gross international reserves (months of next year's imports): 7.7 (2024); 7.1 (2025 proj.); 6.2 (2026 proj.)
- Public sector debt (gross, percent of GDP): 59.9 (2024); 62.4 (2025 proj.); 63.2 (2026 proj.)
  - Of which: Central Government debt: 57.6 (2024); 58.7 (2025 proj.); 59.4 (2026 proj.)
- Oil production (millions of barrels per day): 1.10 (2024); 1.08 (2025 proj.); 1.08 (2026 proj.)
- Oil and gas exports (billions of U.S. dollars): 34.5 (2024); 29.4 (2025 proj.); 27.9 (2026 proj.)
- Angola oil price (average, U.S. dollars per barrel): 78.5 (2024); 66.6 (2025 proj.); 62.2 (2026 proj.)
- Brent oil price (average, U.S. dollars per barrel): 79.9 (2024); 67.7 (2025 proj.); 63.3 (2026 proj.)

### Staff appraisal and next steps
- Staff and Directors support continued engagement with the Fund.
- Emphasis on prompt policy adjustments, prudent debt management, advancing structural reforms, mobilizing non-oil revenue, and strengthening the financial stability and AML/CFT frameworks.
- Completion of the 2025 Financial System Assessment Program and further IMF technical assistance on revenue mobilization and Public Financial Management are encouraged.

*Source: IMF staff report and Executive Board discussions, Angola Post-Financing Assessment (July 24, 2025).*

### 6.      The authorities remained more optimistic regarding the growth outlook.

### 6.      The authorities remained more optimistic regarding the growth outlook.

### Authorities' outlook and growth expectations
- Authorities acknowledged significant uncertainty around the external environment and oil sector outlook and concurred on the need for mitigation measures supported by structural reforms to spur non-oil growth.
- Authorities remained more optimistic on oil production and overall growth relative to staff, noting:
  - efforts to stimulate activity through import substitution measures; and
  - potential for agriculture, forestry, fisheries, manufacturing, and trade in services to drive non-oil growth despite external headwinds.
- Authorities expected disinflation to continue and reiterated commitment to bringing down inflation while fostering growth.

### Fiscal policy — key findings and projections
- 2024 fiscal outturn:
  - The fiscal deficit ended 2024 at 1.0 percent of GDP as projected in A4.
  - Non-oil primary deficit slipped by 0.4 ppts of GDP relative to A4, reaching 6.1 percent of GDP versus 5.7 percent projected in A4.
  - Stronger growth and higher oil production supported better-than-expected performance in oil and non-oil tax revenues.
  - Current spending exceeded projections by larger margins than non-oil revenue gains.
- Baseline fiscal outlook revisions:
  - Overall deficit projected to widen to 2.8 percent of GDP in 2025, 1.5 ppts of GDP higher than projected in A4.
  - Overall deficit projected to reach 3.0 percent of GDP in 2026—primarily driven by a decline in oil revenues, an increase in capital expenditures, and a delay in fuel subsidy reform implementation.
- Fuel subsidy reform and fiscal mechanics:
  - Anticipated completion of fuel subsidy reform postponed from end-2025 (as assumed at A4) to 2028.
  - Savings from fuel subsidy reform in 2025 (relative to 2024) are estimated at 1.4 ppts of GDP in the baseline as opposed to 1.7 percent in A4.
    - In the first half of 2025, subsidies on diesel were reduced from 70 percent to 56 percent of the reference price; estimated savings are approximately 0.3 percent of GDP.
    - Staff baseline assumes fuel subsidy reductions of about 0.7 percent of GDP for the full year in 2025 with subsequent measures in the remaining year.
  - Starting from 2025, fuel subsidies reported in the fiscal framework are recorded on a net basis to account for Sonangol’s oil tax receivables used to cover the cost of fuel subsidies.
  - Fuel subsidy expenditure estimated to fall from 2.7 percent of GDP in 2024 to 1.3 percent of GDP in 2025 (Text Table 1).
- Authorities’ planned measures for 2025:
  - Plan to close about half of the emerging fiscal financing gap in 2025 with a spending freeze and the rest with additional external financing.
  - Authorities plan to freeze spending by about 0.6 ppt of GDP in 2025 to contain the fiscal deficit to 2.2 percent of GDP and secure additional financing of about 0.9 ppts of GDP.
  - Spending freeze to include: (i) capital projects with low execution rates; (ii) non-essential goods and services; and (iii) further restraining subsidy payables.
- Debt and medium-term projections:
  - Sustained primary surpluses and somewhat resilient GDP growth are expected to keep the debt-to-GDP ratio broadly stable over the medium term.
  - Debt-to-GDP ratio now projected to reach 60 percent—the Fiscal Sustainability Law (FSL)’s medium-term target—in 2030 instead of 2027 as projected in A4.
- Domestic revenue mobilization:
  - Draft law to reform the corporate income tax (CIT) submitted to Parliament; draft personal income tax (PIT) law under public consultation and expected to be submitted to Parliament later in the year.
  - Authorities are progressing on efforts to broaden the tax base by reducing informality and advancing property tax implementation.
  - Authorities are not counting on impact on tax yields until 2027.
- Fiscal transparency and PFM reforms:
  - Authorities plan to begin publishing quarterly fiscal reports under the 2014 GFSM starting in August 2025.
  - Efforts to meet EITI standards need to be stepped up; first validation process concluded in June 2025 with Angola required to address 25 corrective actions before the next Validation in April 2028.
  - With IMF TA, authorities are strengthening quantification, reporting, and management of fiscal risks. Progress will be reflected in a fiscal risk statement to be published as an annex to the draft 2026 budget in October 2025.
  - Five-year mandated review of the FSL scheduled for Fall 2025.
- Near-term financing pressures and financing strategy:
  - External debt service due in 2025 projected to amount to US$10.5 billion (9.1 percent of GDP).
  - That amount is equivalent to oil tax revenue (8.6 percent of GDP); deviations in oil prices or oil production would require additional external borrowing or create exchange rate pressure.
  - Authorities’ 2025 financing strategy includes borrowing from multilateral and commercial creditors; part of external debt service expected to be financed through issuance in the domestic debt market (local or foreign currency denominated).
  - Multilateral borrowing includes committed project loans of US$4 billion.
  - Long-term yields on Kwanza-denominated debt have begun to ease alongside declining inflation, but remain elevated and the market’s capacity to absorb rapid issuances remains uncertain.
- Identified fiscal gap and staff recommendations:
  - A potential fiscal financing gap of 1.5–2.0 percent of GDP annually projected for 2025–27.
  - Staff recommends an upfront fiscal adjustment, mobilization of low-cost donor financing starting in 2025, and greater exchange rate flexibility to buffer oil revenue volatility.
  - Staff welcomes the planned expenditure freeze and recommends proceeding promptly given volatility in oil prices, oil production, and sovereign spreads.
  - Staff cautioned against two potentially unsustainable financing options:
    - Excessive domestic borrowing risks increasing banks’ sovereign exposure, potentially causing a depreciation-inflation spiral and crowding out private credit.
    - Costly short-term external debt, often collateralized with complex terms, risks accumulating onerous debt service and undermining investor confidence.
  - Debt management should prioritize low-cost financing, mobilize donor support, and smooth debt service where feasible.
- Fiscal reform priorities:
  - Continue fuel subsidy reform with appropriate communication strategies and targeted protection for the most vulnerable.
  - Accelerate PFM reforms to strengthen fiscal transparency, limit arrears accumulation, and improve spending efficiency.
  - Reaffirm commitment to a clear and prudent debt limit under the revised FSL to anchor the medium-term fiscal framework.

### Monetary and financial sector policies — key findings and recommendations
- Monetary stance and inflation:
  - BNA has maintained tight monetary policy, supported by improved policy transmission, while inflation continued to ease from its peak.
  - Based on expected 12-month-ahead inflation, staff assesses the current monetary policy stance—defined in a forward-looking manner—as mildly tight.
  - The short-term real neutral rate is assessed at 2.5–3.5 percent, while current real policy rate is estimated at 3.5–4.5 percent.
  - Staff advises the BNA against a premature monetary policy easing; delay easing until inflation consistently falls below the policy rate, projected to occur by end-2025.
  - Sustained improvements in the monetary policy implementation framework and streamlining liquidity management and central bank operations remain priorities.
- Financial system resilience and reforms:
  - At a system level, liquidity and capital buffers are above minimum regulatory requirements, but buffers are uneven across institutions.
  - Some financial soundness indicators have worsened, such as NPLs and capital adequacy.
  - A longstanding problem bank remains unresolved despite signals in February 2025 that resolution measures were under consideration.
  - Limited progress reported on financial sector reforms to improve financial intermediation.
  - Ongoing FSAP will examine financial stability and the financial safety net in greater depth.
- AML/CFT progress:
  - Steps taken toward exiting the FATF grey list; first progress report submitted for the June 2025 FATF plenary meeting.
  - Authorities are implementing measures to: (i) strengthen risk-based supervision, particularly on non-banking institutions; (ii) enforce timely access to beneficial ownership information; and (iii) strengthen enforcement through investigation, prosecutions, and targeted financial sanctions.
  - Following grey listing, Angola was included in the European Union high-risk third country jurisdiction for AML/CFT deficiencies in June 2025. There has been no noticeable impact on correspondent banking relationships.
- Financial stability recommendations:
  - Close monitoring of systemic risks, including banks’ exposure to government debt and FX-related financial stability risks.
  - Enhance supervision related to FX exposures and expand/diversify financial sector assets and investor base.
  - Operationalize the financial safety net and the newly established resolution function; build operational capabilities for crisis management and resolution.
  - Prioritize refinement of resolution plans for weak and systemically important banks.
  - Implement the FATF Action Plan to ensure timely exit from the FATF grey list.

*Source: IMF staff report content provided in the supplied PDF excerpt.*

### 24.      The BNA reaffirmed its commitment to reducing inflation and transitioning to an

### 24.      The BNA reaffirmed its commitment to reducing inflation and transitioning to an

### Monetary policy and central bank commitments
- The BNA reaffirmed its commitment to reducing inflation and transitioning to an inflation-targeting framework.
- The BNA assesses that the current monetary policy effectively supports its objectives, as reflected in declining inflation while maintaining economic growth.
- Planned actions:
  - Strengthen its monetary operations framework in line with IMF capacity development advice to enhance policy effectiveness and support the transition toward inflation targeting.
  - Improve the bank supervision and resolution frameworks.
  - Reaffirmed commitment to implementing the FATF Action Plan to support timely removal from the grey list.
- The BNA reiterated commitment to a market-determined exchange rate with minimal FX interventions and noted that shallow and concentrated FX market structure limits the scope for greater exchange rate flexibility.
- The BNA anticipates forthcoming TA from the IMF regarding recommendations to enhance FX market operations.

### External sector issues — background and key statistics
- Preliminary balance of payments data for 2024 shows the external sector ended the year in a stronger position than anticipated in A4 (Tables 4a and 4b; and Figure 3).
- Current account and financial account:
  - The current account surplus ended 2024 stronger than anticipated by 1.3 percent of GDP.
  - Preliminary financial account net outflows were larger at 3.7 percent of GDP (a revision from 3.5 percent of GDP in A4), reflecting stronger net exports.
- 2025–2026 projections and reserves:
  - The current account surplus for 2025 is projected to drop to 0.9 percent of GDP—down from 5.4 percent in 2024—and further to 0.5 percent in 2026, largely reflecting a weaker trade balance.
  - Overall financial net outflows for 2025 are projected to decrease to 1.8 from 3.7 in 2024.
  - Gross international reserves are projected at US$14.3 billion at end-2025, 90 percent of Adequacy of Reserve Assessment (ARA) metric.
- Exchange rate developments:
  - Exchange rate flexibility improved in the first half of 2024, with some two-way volatility; exchange rate remained stable since October 2024.
  - Authorities noted stability primarily driven by market dynamics, with the central bank implementing minimal interventions and stepping in mainly during shortages of FX required for imports.
- Policy discussions on FX:
  - The exchange rate should continue to serve as a key shock absorber to adjust to volatility in oil exports and uncertain global conditions.
  - FX interventions should be judiciously employed, limited to addressing instances of excess volatility that threaten macro-financial stability.
  - Reducing market concentration and improving FX market functioning by greater price discovery is a priority.
  - Support efficient FX market functioning while maintaining interventions through a transparent, rules-based FXI framework; FX intervention rules should be carefully calibrated to safeguard international reserves and avoid delaying exchange rate adjustment in line with fundamentals.

### Structural issues and diversification
- Oil dependence:
  - Oil accounts for 60 percent of fiscal revenue and 94 percent of exports, leaving Angola highly exposed to oil price volatility.
- Diversification context:
  - Diversification efforts to date have primarily focused on import substitution, including licensing requirements for agricultural products.
  - Import substitution measures risk limiting access to cheaper imports, increasing prices, reducing competition, and accentuating rent-seeking.
  - Broad-based (horizontal) reforms—governance, streamlining business regulations, and liberalizing the economy—are crucial for diversification.
- Authorities’ stance:
  - Authorities agreed with staff on the importance of economic diversification, highlighted the success of import substitution measures thus far and their commitment to diversification efforts envisaged under the NDP, including those recommended by staff.
- Note: A more recent example is tightening import licensing for meat and poultry products in early 2025.

### Capacity to repay and risk scenarios — key figures and projections
- IMF credit outstanding:
  - Outstanding IMF credit is SDR 2.8 billion (US$3.8 billion, 384 percent of quota, 27 percent of GIR) in March 2025.
  - IMF credit outstanding will peak in 2025, reaching 2.9 percent of GDP and 23.6 percent of gross international reserves.
  - Repayments to the IMF in nominal terms are projected to peak in 2026, reaching US$863 million (i.e., 2.8 percent of exports).
  - Repayments as a share of GIR will peak at 7.0 percent in 2027, gradually declining thereafter and concluding by end-2031 under the baseline.
- Main risk factors identified:
  - International oil prices:
    - Baseline assumes a decline in oil prices in line with WEO assumptions; a sharper-than-expected drop could weaken external and fiscal positions, discourage investment, and heighten production challenges.
    - There is an upside risk to oil prices as well.
  - Delays in fiscal adjustment:
    - Fiscal stance is expected to loosen in the near term, beyond what was envisaged in A4.
    - Failure to implement adequate upfront consolidation measures starting 2025 could widen the fiscal deficit, increase reliance on new debt issuance, intensify government cash flow pressures and liquidity risks, and weigh on exchange rate, international reserves, and medium-term viability.
  - Premature monetary easing:
    - Pressures on the BNA to prematurely ease monetary conditions to accommodate a sharp increase in government financing needs could jeopardize disinflation efforts, lead to persistently high domestic borrowing costs, crowd out private sector credit, deepen bank-sovereign nexus, and undermine growth.
  - Capital inflows and FX liquidity:
    - Staff baseline projects sustained current account surpluses, but large FX debt repayments during 2025–27 are expected to strain FX liquidity, absorbing most projected CA inflows especially absent prospects for capital inflows.
    - Without sufficient capital inflows, public debt repayments could place pressure on the exchange rate and international reserves.
    - Excessive reliance on administrative measures to restrict capital outflows and limit FX convertibility could undermine investor confidence and discourage FDI.
- Policy response (risk mitigation priorities):
  - Limit erosion of fiscal and external buffers to reduce vulnerabilities to external shocks.
  - Prudently and proactively manage public debt.
  - Strengthen investor relations to bolster market confidence.
  - Promote economic diversification.
  - Implement pre-emptive fiscal mitigation measures to address any shortfalls in external inflows under the baseline.
  - Maintain exchange rate flexibility and continued monetary tightening to facilitate adjustment while keeping inflation expectations anchored.
  - Fiscal policy should reprioritize spending to safeguard debt sustainability while protecting social expenditures; lower-priority capital spending and streamlining current expenditures (goods, services, administrative costs) should bear the brunt of adjustment.
  - The non-oil fiscal balance would need to be adjusted by around 1–1.5 percent of GDP by 2026—on top of measures recommended under the baseline—to offset potential revenue shortfalls and partly contain widening of the deficit.
  - Enhanced monitoring of the financial sector to preserve stability; mobilize support from development partners and implement growth-enhancing structural reforms, including on anti-corruption and rule of law.
- Downside scenario specifics:
  - Under the downside scenario, oil prices and oil production are assumed to fall below $50 dollars per barrel and below 1 million barrel per day, respectively in the near term.
  - In this scenario, repayments to the IMF as a share of GIR would peak in 2027 at 8.3 percent and repayments as a share of exports would peak in 2026 at 3.0 percent—compared to 7.0 and 2.8 percent in the baseline.
  - Implementation of the policy actions described above are most urgently needed under this downside scenario to avoid a disorderly macroeconomic adjustment.

### Staff appraisal — assessment and recommended priorities
- Recent developments:
  - Angola ended 2024 stronger than anticipated but was hit by volatility in oil revenues and tightening external financial conditions in 2025.
  - Growth reached a decade-high of 4.4 percent in 2024, driven by both oil and non-oil sectors.
  - Debt declined and external market access improved by end-2024; inflation moderated from mid-2024, supported in part by improved monetary policy transmission.
  - Renewed vulnerabilities have emerged driven by volatility in oil production and prices, and heightened sovereign spreads.
- Capacity to repay:
  - Angola’s capacity to repay is assessed to remain adequate but subject to increased risks relative to last year’s PFA due to the significant oil price shock and sizeable external debt service equivalent to oil tax revenue.
  - Under the baseline, projected debt service will rise in 2026, with a significant share of repayments falling due during 2026–29, followed by a gradual decline thereafter.
  - A larger-than-projected drop in oil prices or production would require additional external borrowing and could weaken repayment indicators.
- Policy priorities emphasized by staff:
  - Proceed with the planned spending freeze; authorities indicate readiness to adjust though with some delays relative to the path anticipated in A4.
  - Rationalize expenditure and contain borrowing for current spending to conserve borrowing space for growth.
  - Continue non-oil revenue mobilization and income tax modernization efforts.
  - Rationalize public investment, cut non-essential spending on goods and services, continue phasing out fuel subsidies while protecting the most vulnerable.
  - Smooth debt repayments and prioritize low-cost financing.
  - Advance the privatization agenda and sustain efforts to strengthen PFM to avoid accumulation of arrears and enhance spending efficiency.
  - Maintain exchange rate flexibility as a shock absorber and avoid premature monetary policy easing to sustain disinflation.
  - Closely supervise systemic risks including the sovereign-bank nexus and exchange rate-related vulnerabilities.
  - Strengthen the financial stability framework and enhance financial intermediation to support growth.

*Source: IMF staff report excerpts provided in the content unit.*

### 39.      Improving the business climate and pursuing prudent borrowing practices are critical in

### 1agoea2025003-source-pdf - 39.      Improving the business climate and pursuing prudent borrowing practices are critical in

### Macroeconomic policy message
- "Improving the business climate and pursuing prudent borrowing practices are critical in cementing the hard-won trajectory towards macroeconomic stability and sustained growth."
- "Mobilizing financing for development is critical."
- "Further progress on horizontal policies to promote non-oil sector growth would support the diversification efforts envisaged under the NDP and the AU’s Agenda 2063."

### Fiscal developments (Figure 1; Tables 1, 2a, 2b)
- Sovereign spreads have picked up since the start of 2025; oil prices came under pressures.
- Oil revenues are expected to moderate in 2025 due to softer oil prices; non-oil revenues projected to decrease slightly.
- Capital expenditures are expected to increase in 2025, entailing a moderate widening of 2025 fiscal deficit.
- Table 1 (selected indicators, 2022–30):
  - Real gross domestic product: 4.2 (2022), 1.3 (2023), 3.8 (2024), 4.4 (2025), 3.0 (2026), 2.1 (2027), 3.2 (2028), 2.1 (2029), 2.5 (2030), 2.9 (2031), 3.0 (2032), 3.1 (2033) [preserves full series as in table].
  - Total revenue (percent of GDP): 20.1 (2022), 16.9 (2023), 16.6 (2024), 17.4 (2025), 16.0 (2026), 15.6 (2027), 15.8 (2028), 15.4 (2029), 15.1 (2030), 14.8 (2031), 14.2 (2032), 13.8 (2033).
  - Total expenditure (percent of GDP): 19.5 (2022), 18.8 (2023), 17.6 (2024), 18.4 (2025), 17.3 (2026), 18.3 (2027), 17.7 (2028), 18.4 (2029), 18.1 (2030), 17.4 (2031), 16.8 (2032), 16.2 (2033).
  - Overall fiscal balance (percent of GDP): 0.6 (2022), -1.8 (2023), -1.0 (2024), -1.0 (2025), -1.3 (2026), -2.8 (2027), -1.9 (2028), -3.0 (2029), -2.9 (2030), -2.6 (2031), -2.5 (2032), -2.4 (2033).
  - Non-oil primary fiscal balance (NOPB, percent of GDP): -7.3 (2022), -6.3 (2023), -5.7 (2024), -6.1 (2025), -7.2 (2026), -6.8 (2027), -7.1 (2028), -6.6 (2029), -6.3 (2030), -5.7 (2031), -5.3 (2032), -5.0 (2033).
- Table 2a (central government operations, selected levels in billions of kwanzas):
  - Revenue: 13,183 (2022), 13,053 (2023), 16,637 (2024), 17,440 (2025), 19,904 (2026), 19,194 (2027), 23,118 (2028), 26,591 (2029), 30,040 (2030), 33,593 (2031), 38,057 (2032).
  - Taxes: 12,197 (2022), 12,356 (2023), 15,640 (2024), 16,617 (2025), 18,304 (2026), 18,161 (2027), 21,861 (2028), 25,120 (2029), 28,336 (2030), 31,612 (2031), 35,753 (2032).
  - Total expenditure: 12,800 (2022), 14,463 (2023), 17,664 (2024), 18,451 (2025), 21,539 (2026), 22,597 (2027), 27,600 (2028), 31,768 (2029), 35,360 (2030), 39,618 (2031), 44,628 (2032).
  - Net lending (+) / Net borrowing (-): 383 (2022), -1,410 (2023), -1,026 (2024), -1,011 (2025), -1,635 (2026), -3,403 (2027), -4,482 (2028), -5,177 (2029), -5,320 (2030), -6,025 (2031), -6,571 (2032).
  - Memorandum: Angola oil price (average, U.S. dollars per barrel) 100.3 (2022), 80.6 (2023), 78.5 (2024), 78.5 (2025), 70.3 (2026), 66.6 (2027), 62.2 (2028), 62.6 (2029), 63.6 (2030), 64.5 (2031), 65.3 (2032).
- Table 2b (percent of GDP): Revenue 20.1 (2022) to 13.8 (2032) and Expenditure 19.5 (2022) to 16.2 (2032) — full series preserved as in table.

### Financial sector and banking (Figure 2; Table 7)
- Bank credit grew in nominal terms but remained limited relative to GDP; deposits remained robust.
- System-wide liquidity and capital buffers declined somewhat but remain adequate; deposit and loan dollarization remain stable.
- Nonbanks' market share increased to 11 percent of total private sector loans; exposure to sovereign debt has increased.
- Table 7 (financial soundness indicators, selected points):
  - Regulatory capital to risk-weighted assets: 19.2 (Dec-16), 18.9 (Dec-17), 24.2 (Dec-18), 23.2 (Dec-19), 20.3 (Dec-20), 23.8 (Dec-21), 28.4 (Dec-22), 26.0 (Dec-23), 21.8 (Sep-24), 20.7 (Dec-24), 22.9 (Mar-25).
  - Nonperforming loans to gross loans: 13.1 (Dec-16), 28.8 (Dec-17), 28.3 (Dec-18), 32.4 (Dec-19), 18.4 (Dec-20), 20.3 (Dec-21), 14.4 (Dec-22), 15.6 (Dec-23), 19.6 (Sep-24), 19.2 (Dec-24), 17.2 (Mar-25).
  - Return on assets (ROA): 2.2 (Dec-16), 2.1 (Dec-17), 4.4 (Dec-18), -1.3 (Dec-19), -2.9 (Dec-20), 2.2 (Dec-21), 2.7 (Dec-22), 2.9 (Dec-23), 3.0 (Sep-24), 3.0 (Dec-24), 5.2 (Mar-25).
  - Loan/deposits: 51.6 (Dec-16), 49.3 (Dec-17), 44.2 (Dec-18), 42.0 (Dec-19), 32.7 (Dec-20), 35.9 (Dec-21), 34.4 (Dec-22), 34.9 (Dec-23), 40.5 (Sep-24), 43.6 (Dec-24), 42.7 (Mar-25).
  - Number of reporting banks: 27 (Dec-16), 29 (Dec-17), 27 (Dec-18), 26 (Dec-19), 26 (Dec-20), 25 (Dec-21), 23 (Dec-22), 23 (Dec-23), 23 (Sep-24), 22 (Dec-24), 22 (Mar-25).

### External sector and reserves (Figure 3; Tables 4a, 4b)
- Trade balance expected to moderate due to pressures of oil prices; contributing to a modest current account surplus.
- Financial account outflows increased in 2024, driven by higher other investment net outflows; FDI-related outflows projected to remain contained.
- International reserves coverage remains strong; REER appreciated as domestic inflation outpaced trading partners.
- Table 4a (Balance of Payments, selected levels in millions of U.S. dollars):
  - Current account (millions): 11,763 (2022), 4,185 (2023), 4,736 (2024), 6,277 (2025), 2,617 (2026), 1,082 (2027), 519 (2028), 723 (2029), 1,084 (2030), 1,162 (2031), 1,323 (2032).
  - Trade balance (millions): 32,771 (2022), 21,800 (2023), 22,498 (2024), 22,605 (2025), 18,698 (2026), 16,829 (2027), 15,810 (2028), 16,088 (2029), 16,692 (2030), 17,240 (2031), 17,447 (2032).
  - Exports, f.o.b. (millions): 50,038 (2022), 36,885 (2023), 37,878 (2024), 36,795 (2025), 34,686 (2026), 32,254 (2027), 30,947 (2028), 31,489 (2029), 32,294 (2030), 33,316 (2031), 34,209 (2032).
  - Gross international reserves (excluding pledged repo securities, millions): 14,661 (2022), 14,727 (2023), 15,227 (2024), 15,768 (2025), 15,277 (2026), 14,268 (2027), 12,668 (2028), 11,968 (2029), 12,668 (2030), 13,418 (2031), 14,218 (2032).
  - Months of next year's imports: 7.4 (2022), 7.8 (2023), 7.3 (2024), 7.7 (2025), 7.3 (2026), 7.1 (2027), 6.2 (2028), 5.8 (2029), 5.9 (2030), 6.1 (2031), 6.0 (2032).
- Table 4b (percent of GDP): Current account 8.3 (2022), 3.7 (2023), 4.1 (2024), 5.4 (2025), 2.4 (2026), 0.9 (2027), 0.5 (2028), 0.6 (2029), 0.9 (2030), 0.9 (2031), 0.9 (2032).

### IMF capacity-to-repay indicators (Figures 4 and 5; Table 8)
- Figures 4 and 5 present Capacity To Repay (CtR) indicators under Baseline and Downside scenarios.
- Table 8 (Indicators of IMF Credit, selected series):
  - Stock of existing and prospective Fund credit (SDR millions, first series): 3,079.3 (2023), 2,900.5 (2024), 2,526.9 (2025), 1,991.3 (2026), 1,455.8 (2027), 920.2 (2028), 518.7 (2029), 162.0 (2030), 0.0 (2031), 0.0 (2032).
  - Fund obligations (percent of Quota, baseline): 44.2 (2023), 51.9 (2024), 69.4 (2025), 87.2 (2026), 84.0 (2027), 81.5 (2028), 60.9 (2029), 52.9 (2030), 25.2 (2031), 2.8 (2032).
  - Fund credit outstanding (percent of Quota, baseline): 416.1 (2023), 391.9 (2024), 341.4 (2025), 269.1 (2026), 196.7 (2027), 124.3 (2028), 70.1 (2029), 21.9 (2030), 0.0 (2031), 0.0 (2032).
  - Baseline memorandum: Gross international reserves 14,727 (2024), 15,768 (2025), 14,268 (2026), 12,668 (2027), 11,968 (2028), 12,668 (2029), 13,418 (2030), 14,218 (2031), 15,150 (2032), 15,832 (2033).

### Public debt and financing (Tables 5 and 6)
- Table 5 (Public debt, percent of GDP, 2022–30):
  - Total public debt: 56.1 (2022), 72.4 (2023), 62.4 (2024), 59.9 (2025), 63.3 (2026), 62.4 (2027), 61.8 (2028), 63.2 (2029), 63.5 (2030), 62.8 (2031), 61.8 (2032), 60.9 (2033).
  - External debt: 40.7 (2022), 54.2 (2023), 49.8 (2024), 44.3 (2025), 52.2 (2026), 48.5 (2027), 50.2 (2028), 50.8 (2029), 50.9 (2030), 49.2 (2031), 47.2 (2032), 45.2 (2033).
  - Owed to: Commercial banks 26.6 (2022) to 25.7 (2033); Official creditors 10.6 (2022) to 19.2 (2033).
- Table 6 (Fiscal financing needs and sources, 2025–30, in billions of U.S. dollars):
  - Financing needs (A): 13.2 (2025), 11.4 (2026), 10.3 (2027), 12.2 (2028), 12.5 (2029), 10.5 (2030).
  - Debt service (component of A): 16.8 (2025), 14.5 (2026), 12.7 (2027), 14.3 (2028), 14.4 (2029), 12.5 (2030).
    - External debt service: 10.5 (2025), 8.6 (2026), 8.0 (2027), 9.8 (2028), 9.3 (2029), 6.8 (2030).
    - Domestic debt service: 6.2 (2025), 5.9 (2026), 4.7 (2027), 4.4 (2028), 5.1 (2029), 5.6 (2030).
  - Financing sources (B) equal Financing needs (A) across 2025–30 in table: External debt disbursements 7.5 (2025), 6.2 (2026), 6.3 (2027), 8.3 (2028), 8.3 (2029), 5.7 (2030); Domestic debt disbursements 5.7 (2025), 5.2 (2026), 4.0 (2027), 3.9 (2028), 4.3 (2029), 4.9 (2030).
  - Memoranda: Total usable cash balances 0.8 (2025), 1.1 (2026), 1.4 (2027), 1.7 (2028), 1.9 (2029), 2.1 (2030); Total usable cash balances (in months of expenditure) 1.2 (2025), 1.6 (2026), 1.9 (2027), 2.2 (2028), 2.4 (2029), 2.6 (2030).
  - External debt rollover rate: 71.6 (2025), 72.1 (2026), 78.9 (2027), 84.5 (2028), 88.6 (2029), 82.7 (2030).
  - Domestic debt rollover rate: 98.8 (2025), 89.4 (2026), 84.0 (2027), 88.7 (2028), 83.9 (2029), 86.5 (2030).

### Monetary sector (Table 3)
- Monetary aggregates (selected, end of period, billions of kwanzas):
  - Broad money (M3): 11,356 (2022), 15,644 (2023), 16,420 (2024), 20,208 (2025), 24,573 (2026), 28,763 (2027), 33,889 (2028), 40,053 (2029), 47,382 (2030).
  - Money and quasi-money (M2): same series as M3 in table.
  - Net foreign assets: 6,105 (2022), 10,614 (2023), 12,383 (2024), 15,476 (2025), 16,780 (2026), 18,571 (2027), 22,668 (2028), 27,102 (2029), 32,063 (2030).
  - Claims on private sector: 4,056 (2022), 5,225 (2023), 6,551 (2024), 7,832 (2025), 8,862 (2026), 9,796 (2027), 10,871 (2028), 12,081 (2029), 13,410 (2030).
  - Reserve money: 2,774 (2022), 3,725 (2023), 4,167 (2024), 4,916 (2025), 5,776 (2026), 6,564 (2027), 7,207 (2028), 7,975 (2029), 8,869 (2030).
- Memorandum: Credit to the private sector (percent change) -4.8 (2022), 28.8 (2023), 28.1 (2024), 25.4 (2025), 27.0 (2026), 19.6 (2027), 13.7 (2028), 13.1 (2029), 10.5 (2030), 11.0 (2031), 11.1 (2032), 11.0 (2033).

### Balance of payments dynamics (Tables 4a/4b selected)
- Exports of goods, f.o.b. (percent of GDP): 35.1 (2022), 32.8 (2023), 33.1 (2024), 31.9 (2025), 31.5 (2026), 28.0 (2027), 28.2 (2028), 27.4 (2029), 26.4 (2030), 25.6 (2031), 24.5 (2032).
- Imports of goods, f.o.b. (percent of GDP): 12.1 (2022), 13.4 (2023), 13.4 (2024), 12.3 (2025), 14.5 (2026), 13.4 (2027), 13.8 (2028), 13.4 (2029), 12.8 (2030), 12.3 (2031), 12.0 (2032).
- Terms of trade (percent change): 34.5 (2022), -19.3 (2023), -4.0 (2024), -2.2 (2025), -10.4 (2026), -12.9 (2027), -6.3 (2028), -0.1 (2029), 0.2 (2030), -0.6 (2031), -0.7 (2032).

### Key structural and policy takeaways
- Priority measures emphasized: improving the business climate, mobilizing development financing, pursuing prudent borrowing practices, and horizontal policies to promote non-oil sector growth to support NDP and AU Agenda 2063 diversification efforts.
- Fiscal consolidation indicators point to a moderate fiscal deficit widening in 2025 and a non-oil primary fiscal balance that remains substantially negative across the projection horizon (e.g., NOPB -7.3 (2022) to -5.0 (2032) percent of GDP).
- Reserves and external buffers: gross international reserves remain at multi-month coverage (months of next year's imports between 7.4 and 6.0 across 2022–2032 in table), though projections show some volatility tied to oil prices and external flows.
- Public debt remains elevated with total public debt rising to 72.4 percent of GDP in 2023 and projected around the low-60s percent of GDP through 2032.

*Sources: Angolan authorities; and IMF staff estimates and projections. (Content extracted from the supplied IMF chapter/section tables and figures.)*

### Annex I. Downside Scenario

### Annex I. Downside Scenario

### Scenario description
- Starting in the second half of 2025, Brent oil prices are assumed to decline to US$50 per barrel.  
- Domestic oil production is projected to fall to an average of 1 million barrels per day in 2026.  
- The scenario assumes a gradual recovery in both oil prices and production over the medium term, with the shock considered transitory and largely resolved by the end of the projection horizon in 2030.  
- The shock is driven by a supply glut combined with a slowdown in global growth.

### Macroeconomic spillovers and channels
- External financing conditions:
  - Oil price developments could change risk aversion in international markets for Angola.
  - A significant increase in risk premiums could heighten FX liquidity risks and exert pressure on the exchange rate and domestic interest rates.
- Growth:
  - Overall growth would stall due to declining oil production and spillovers from an abrupt fiscal adjustment.
  - Heavy reliance on domestic borrowing to offset scarce external financing would crowd out private sector credit and amplify the contractionary impact.
  - The financial sector would remain resilient under the scenario.
- Fiscal outcome:
  - Slower growth and a downturn in the oil sector would reduce both oil and non-oil tax bases.
  - Exchange rate flexibility could cushion the impact of declining foreign exchange revenues but would increase public debt through FX debt revaluation effects.

### Key quantitative impacts (downside vs baseline)
- Gross international reserves (GIR):
  - Under the downside scenario, GIR would decline to around 50 percent of the Adequacy of Reserve Assessment (ARA) metric, down from an average of about 90 percent of ARA metric under the baseline.
- IMF credit outstanding relative to GIR:
  - Would rise to 24 percent in 2026, compared to 21 percent under the baseline.
- Repayments to the IMF:
  - Projected to peak in 2026 reaching 7.8 percent of GIR (instead of 6.8 percent under the baseline) and 3.0 percent of exports (instead of 2.8 percent under the baseline).
- Public debt and fiscal metrics:
  - Public debt would rise by nearly 30 ppts of GDP over the next two years, largely driven by FX revaluation effects, peaking at 91 percent of GDP before stabilizing over the medium term.
  - The fiscal deficit would widen by an average of 2 ppt of GDP over the projection horizon.
  - The total debt interest-to-revenue ratio would reach 31 percent.
- Exchange rate:
  - The scenario assumes exchange rate depreciation in response to the shock, providing a partial buffer but contributing to FX revaluation effects that increase public debt.

### Modeling and assumptions
- Projections are based on staff assumptions regarding policy measures and exogenous factors consistent with the macroeconomic framework.
- The downside scenario illustrates a hypothetical set of economic shocks and corresponding policy responses, without implying any assessment of their likelihood.
- Projections are informed by staff macroeconomic forecasting model, with the core structure outlined in SIP paper, 2023 Angola Article IV consultation.

_Source : IMF Staff Calculations._

### 2.1 percent of GDP in 2023 to a surplus of 0.4 percent in 2024, reflecting robust revenue mobilization

### 2.1 percent of GDP in 2023 to a surplus of 0.4 percent in 2024, reflecting robust revenue mobilization

### Fiscal position and fiscal policy
- Fiscal balance moved from a deficit of 2.1 percent of GDP in 2023 to a surplus of 0.4 percent in 2024, reflecting robust revenue mobilization and disciplined expenditure execution.
- Authorities stand ready to undertake necessary fiscal adjustments to secure the credibility of the medium-term fiscal framework while safeguarding productive investments and protecting vulnerable citizens.
- Developing a short-term fiscal response to ensure alignment with current macroeconomic conditions and projected financing needs.
- Spending rationalization priorities:
  - Partial freeze on spending on capital projects with low execution rates and non-essential goods and services.
- Fuel subsidy reform:
  - Gradual reduction of diesel subsidies, including a 33 percent increase in the price of diesel in July 2025.
- Revenue reform agenda to expand the tax base and enhance non-oil revenue mobilization:
  - Anticipated year-end approval of corporate and personal income tax codes.
  - Efforts to reduce informality.
  - Implementation of property taxation.
- Tax administration reforms to reinforce tax compliance and audit capacity, expected to improve revenue collection efficiency and fiscal transparency.
- Public financial management enhancements:
  - Rollout of quarterly fiscal reports under the 2014 GFSM to bolster public oversight and support enforcement of the planned spending freeze.
  - Continued technical assistance from the IMF to strengthen fiscal risk management, enhance oversight and privatization of state-owned enterprises, and reduce contingent liabilities.
  - Mandatory five-year review of the Fiscal Sustainability Law (FSL) scheduled to resume in the third quarter of 2025, aiming to align the FSL with international best practices and reaffirm a credible debt limit as a fiscal anchor.

### Debt and financing
- Public debt trajectory:
  - Public debt declined from 72.4 percent of GDP in 2023 to 59.9 percent in 2024 and is projected to increase slightly to 62.4 percent in 2025.
- Authorities acknowledge vulnerability due to a high proportion of foreign currency-denominated obligations.
- Financing strategy priorities:
  - Mobilizing funds from multilateral and commercial sources.
  - Issuing local and foreign currency instruments domestically.
  - Deepening the local debt market.
  - Securing more concessional financing.
- Authorities are closely monitoring near-term maturities and tightening global conditions, backed by adequate external buffers accumulated.

### Monetary policy and financial sector
- Monetary policy actions and outcomes:
  - BNA raised the policy rate from 18.0 percent in November 2023 to 19.5 percent in May 2024, maintaining this level throughout July 2025.
  - Contraction of the monetary base by 10.87 percent as of June 2025.
  - Expansion of M2 in national currency by 6.5 percent as of June 2025.
  - BNA views monetary conditions as adequate and remains committed to a prudent, forward-looking framework guided by data and clear communication.
  - Commitment to a market-driven exchange rate regime with limited foreign exchange interventions.
  - Authorities welcome upcoming IMF technical assistance to improve FX operations and enhance monetary policy effectiveness and credibility.
- Financial system resilience and reforms:
  - System-wide liquidity and capital buffers remain comfortably above regulatory thresholds.
  - Ongoing reforms to strengthen the financial safety net and enhance financial intermediation.
  - Financial Sector Assessment Program (FSAP) is ongoing and expected to yield comprehensive insights into financial stability.
  - Active monitoring of banks’ exposure to sovereign debt and exchange rate vulnerabilities.
  - Initiatives to broaden the financial sector’s asset base and investor participation.
  - Steps to strengthen FX-related supervisory capacity.

### AML/CFT progress
- Key reforms initiated to strengthen supervision, transparency, and enforcement under the national AML/CFT strategy:
  - Implementation of risk-based supervision in banking.
  - Enforcement of effective and deterrent sanctions for money laundering in banking and insurance, with remedial measures in capital markets.
  - Awareness campaigns for non-banking institutions.
  - Issuance of manuals for identifying beneficial owners and politically exposed people (PEPs).
- First FATF progress report submitted in June 2025.
- Correspondent banking relationships remain unaffected.

### Structural reforms and governance
- Priority on promoting private sector–led growth beyond the oil sector to support macroeconomic stability and inclusive and sustainable growth.
- Diversification efforts and measures:
  - Import substitution measures such as licensing requirements for agricultural products to reduce external vulnerabilities and stimulate domestic production.
- Lobito Corridor project:
  - Considered a strategic infrastructure investment and reform initiative to support economic diversification, improve market access for agricultural producers, enhance mining sector productivity, strengthen logistics and digital connectivity, foster industrial development, and generate employment opportunities, particularly for youth and women.
- National Development Plan (NDP) 2023–27:
  - Authorities committed to timely implementation.
  - Plan targets 5 percent annual growth in the non-oil sector to support economic diversification and increased private sector participation.
  - Initiatives to improve the business environment, including reduction of unproductive legal barriers.

### Conclusion
- Authorities remain firmly committed to restoring macroeconomic stability, strengthening fiscal governance, and fostering conditions necessary for inclusive growth.
- Commitment to continue implementing measures to address economic vulnerabilities, improve public sector efficiency, and support the country's long-term development.
- Authorities view their capacity to meet their obligations to creditors as adequate, despite downside risks, and look forward to continuing engagement with the Fund.

*Source: 1agoea2025003-source-pdf*

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_Source: https://www.imf.org/-/media/files/publications/cr/2025/english/1agoea2025003-source-pdf.pdf_