Post Financing Assessment (PFA) Consultation with Angola
IMF News, July 3, 2024
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- Published: July 3, 2024
Executive summary and capacity to repay
- The Executive Board of the International Monetary Fund (IMF) concluded the Post Financing Consultation (PFA) with Angola.
- Angola’s capacity to repay the Fund is adequate though subject to risks.
- Angola remained resilient in 2023 despite weaker oil production and prices.
- Authorities’ reforms started during the EFF 2018–21 in fiscal management, revenue mobilization, debt management, monetary policy, and financial stability have helped enhance the resilience of the Angola economy.
Macroeconomic outlook and growth
- Output growth:
- 2023: 0.9 percent (positive, aided by recovery in oil production in Q4)
- Medium term: expected to stabilize at an average of 3.2 percent (supported by structural reform and diversification)
- Inflation:
- Increased to its highest level in recent years due to currency depreciation and supply constraints.
- Expected to start declining in the second half of 2024 with improved monetary policy transmission and fading supply shocks.
Fiscal position and public debt
- Spending adjustments helped contain the impact of weaker oil prices and lower production in 2023, though fiscal consolidation gains were lower-than-anticipated.
- Non-oil primary fiscal deficit (NOPFD):
- Estimated at 4.4 percent of GDP in 2024
- Expected to steadily decline in the medium-term on modestly improving non-oil revenues, moderately lower current and capital expenditures, and savings from fuel subsidy reform.
- Angola’s oil dependence and large external debt continue to pose fiscal risks, but targets under the Fiscal Sustainability Law are still projected to be reached.
- Downside fiscal risks highlighted:
- (i) decline in domestic oil production or significant fall in international oil prices;
- (ii) slippages in the fuel subsidy reform;
- (iii) negative spillovers from international capital markets.
Executive Board assessment — risks and scenarios
- Baseline: recovery from the 2023 shock is underway; outlook favorable but risks tilted to the downside due to significant exposure to the oil sector.
- Debt service to IMF:
- Under the baseline, projected repayments to the Fund will increase over the medium-term, peaking in 2026.
- Under a severe shock scenario, capacity-to-repay indicators would weaken but remain manageable.
- Shock mitigation measures emphasized:
- Allow the exchange rate to function as a shock absorber.
- Continue fuel subsidy reform and rationalize spending.
Policy recommendations — fiscal, monetary, and financial stability
- Fiscal:
- Sustain fiscal adjustment and rationalize spending in the near-term.
- Continue the fuel subsidy reform with mitigation measures to support the vulnerable and a proactive communication strategy.
- Build additional buffers via tax policy measures to mobilize non-oil domestic revenues.
- Make further progress on the fiscal structural agenda, including public financial management and public investment management reforms.
- Monetary:
- Enhance the monetary policy framework to reduce inflation and support non-oil medium-term growth.
- Maintain a tighter bias in monetary policy in the short-term and improve interbank liquidity management.
- Gradual move toward greater exchange rate flexibility to help ease inflation, anchor inflation expectations, and reduce borrowing costs.
- Policy coordination between the MoF and the BNA on money market operations is essential.
- Financial stability:
- BNA has progressed in operationalizing new frameworks for bank supervision and resolution but needs more decisive implementation and enforcement.
- Prepare for decisive resolution or liquidation of problem banks as necessary, while protecting small depositors and minimizing costs to tax-payers.
- Expedite efforts to establish fiscal backup funding for the DPF and to strengthen legal protection of the BNA.
Structural reforms and long-term diversification
- Implement broad ranging structural reforms to improve the business environment and maintain growth amid a long-term decline of the oil sector.
- Ensure implementation of the NDP consistent with a medium-term fiscal framework and informed by PIMA recommendations.
- Address governance, gender, and climate change issues to achieve economic diversification and sustainable growth.
Angola: Selected Economic Indicators, 2023–25 (selected figures from table)
- Real economy (percent change)
- Real gross domestic product: 0.9 (2023), 2.4 (2024), 2.8 (2025)
- Oil sector: -2.4 (2023), 0.8 (2024), 1.1 (2025)
- Non-oil sector: 1.5 (2023), 2.7 (2024), 3.1 (2025)
- Price indicators
- GDP deflator: 13.4 (2023), 26.5 (2024)
- Non-oil GDP deflator: 13.6 (2023), 25.7 (2024)
- Consumer prices (annual average): 16.3 (2023)
- Consumer prices (end of period): 20.0 (2023), 22.1 (2024), 15.4 (2025)
- Nominal GDP and components (billions of kwanzas)
- Gross domestic product: 75,046 (2023), 97,233 (2024), 115,278 (2025)
- Oil GDP: 11,569 (2023), 15,306 (2024), 16,632 (2025)
- Non-oil GDP: 63,478 (2023), 81,928 (2024), 98,646 (2025)
- GDP in U.S. dollars and per capita
- Gross domestic product (billions of U.S. dollars): 109.5 (2023), 112.6 (2024), 118.5 (2025)
- Gross domestic product per capita (U.S. dollars): 2,963 (2023), 2,945 (2024), 2,993 (2025)
- Central government (percent of GDP)
- Total revenue: 17.4 (2023), 18.1 (2024), 17.2 (2025)
- Of which: Oil-related: 10.3 (2023), 10.7 (2024), 9.7 (2025)
- Of which: Non-oil tax: 6.1 (2023), 6.3 (2024), 6.4 (2025)
- Total expenditure: 19.3 (2023), 16.7 (2024), 15.9 (2025)
- Current expenditure: 15.2 (2023), 13.9 (2024), 13.1 (2025)
- Capital spending: 4.1 (2023), 2.9 (2024)
- Overall fiscal balance: -1.9 (2023), 1.3 (2024), 1.2 (2025)
- Non-oil primary fiscal balance: -6.4 (2023), -4.4 (2024), -3.4 (2025)
- Non-oil primary fiscal balance (percent of non-oil GDP): -7.6 (2023), -5.2 (2024), -4.0 (2025)
- Money and credit (end of period, percent change)
- Broad money (M2): 37.8 (2023), 21.2 (2024)
- Percent of GDP (M2): 20.8 (2023), 19.5 (2024)
- Velocity (GDP/M2): 4.8 (2023), 5.1 (2024)
- Velocity (non-oil GDP/M2): 4.3 (2023), 4.4 (2024)
- Credit to the private sector (annual percent change): 28.8 (2023), 20.3 (2024), 12.5 (2025)
- Balance of payments and external sector
- Trade balance (percent of GDP): 19.9 (2023), 18.8 (2024), 17.5 (2025)
- Exports of goods, f.o.b. (percent of GDP): 33.7 (2023), 32.7 (2024), 31.1 (2025)
- Of which: Oil and gas exports (percent of GDP): 31.7 (2023), 30.5 (2024), 28.4 (2025)
- Imports of goods, f.o.b. (percent of GDP): 13.8 (2023)
- Terms of trade (percent change): -19.7 (2023), -1.8 (2024), -5.8 (2025)
- Current account balance (percent of GDP): 3.8 (2023), 3.4 (2024), 2.2 (2025)
- Gross international reserves (end of period, millions of U.S. dollars): 14,727 (2023), 15,135 (2024), 15,501 (2025)
- Gross international reserves (months of next year's imports): 7.2 (2023), 7.1 (2024)
- Exchange rate
- Official exchange rate (average, kwanzas per U.S. dollar): 685 (2023)
- Official exchange rate (end of period, kwanzas per U.S. dollar): 829 (2023)
- Public debt (percent of GDP)
- Public sector debt (gross)1: 73.9 (2023), 58.5 (2024), 52.1 (2025)
- Of which: Central Government debt: 68.4 (2023), 55.3 (2024), 49.8 (2025)
- Oil sector specifics
- Oil and gas production (millions of barrels per day): 1.205 (2023), 1.237 (2024), 1.253 (2025)
- Oil and gas exports (billions of U.S. dollars): 34.7 (2023), 34.4 (2024)
- Angola oil price (average, U.S. dollars per barrel): 80.6 (2023), 81.0 (2024), 76.7 (2025)
- Brent oil price (average, U.S. dollars per barrel): 82.3 (2023), 82.5 (2024), 77.8 (2025)
Source: IMF Press Release No. 24/260 — Post Financing Assessment (PFA) Consultation with Angola, July 3, 2024.