Angola’s Fragile Stabilization

By Jose Giancarlo Gasha, Gonzalo C Pastor Campos

May 1, 2004

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Jose Giancarlo Gasha, and Gonzalo C Pastor Campos. Angola’s Fragile Stabilization, (USA: International Monetary Fund, 2004) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper discusses the nature of Angola's disinflation strategy in recent years, with special emphasis on the most recent efforts by the Angolan authorities to stabilize the economy. Looking to the past, the paper stresses the costs of the disinflation strategy, as measured by the central bank sizable foreign exchange intervention and the increase in Angola's external liabilities that unfolded in the process. The paper also notes that non-oil fiscal deficits have remained very large. Looking to the future, the paper stresses the pressing need to reduce demand pressures stemming from sizable government spending on wages and salaries, goods and services, subsidies, and other current transfers to the economy. The prescribed fiscal consolidation effort is viewed as critical to curtail the non-oil fiscal deficit, reduce inflation expectations on a lasting basis, and avoid further foreign borrowing on commercial terms, including loans collateralized by future oil revenues.

Subject: Exchange rates, Fiscal consolidation, Fiscal policy, Government debt management, Inflation

Keywords: Authority, Deficit, Exchange rate, Monetary policy, Nominal exchange rate, WP

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/083
Stock No:

WPIEA0832004
ISBN:

9781451850574
ISSN:

1018-5941

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