{
  "title": "IMF Executive Board Concludes 2022 Article IV Consultation with Angola",
  "publication": "IMF News, February 23, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/02/23/pr2352-angola-imf-executive-board-concludes-2022-article-iv-consultation-with-angola",
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  "summary": "Angola’s economy continued to recover from the COVID-19 pandemic in 2022, supported by higher oil prices, improved oil production, and resilient non-oil activity. Non-oil growth was broad-based despite a challenging external environment. Growth is estimated at 3.5 percent for 2023.",
  "publishDate": "2023-02-23",
  "sections": [
    {
      "heading": "Economic performance and near-term outlook",
      "content": "- Angola’s economy continued to recover from the COVID-19 pandemic in 2022, supported by higher oil prices, improved oil production, and resilient non-oil activity.\n- Non-oil growth was broad-based despite a challenging external environment.\n- Growth is estimated at 3.5 percent for 2023.\n- Overall growth is expected to continue in 2023 and reach about 4 percent in the medium term, as the authorities’ structural reform agenda supports the non-oil sector.\n- Downside risks to the near-term outlook include a larger-than-expected decline in global oil prices, renewed global food price pressures, and adverse weather conditions that impact the agriculture sector."
    },
    {
      "heading": "Inflation and monetary policy",
      "content": "- Headline inflation declined significantly to 13.8 percent y/y at end-December 2022, driven by lower global food prices, a stronger kwanza, and previous efforts by the central bank to tighten monetary policy.\n- Inflation should continue its gradually declining path, reaching single digits in 2024.\n- Directors commended the Banco Nacional de Angola’s (BNA) decisive actions that resulted in a large disinflation in 2022.\n- Directors recommended a wait and see approach to monetary policy actions to support the disinflationary path, noting that inflation remains elevated and risks to price stability persist.\n- Directors supported the BNA’s efforts to strengthen policy effectiveness, including by aligning the interbank rate with the policy rate and transitioning toward an inflation targeting framework.\n- Directors welcomed the authorities’ commitment to exchange rate flexibility and their plan to eliminate the remaining exchange restrictions."
    },
    {
      "heading": "Fiscal developments and public debt",
      "content": "- The non-oil primary deficit increased in 2022 following higher-than-budgeted capital expenditure and higher-than-expected fuel subsidy costs.\n- The public debt-to-GDP ratio fell by an estimated 17.5 percentage points of GDP to an estimated 66.1 percent of GDP, aided by a stronger exchange rate.\n- The 2023 budget envisions a resumption of fiscal adjustment, which is necessary to approach the authorities’ twin medium-term fiscal and debt targets and guard against debt vulnerabilities.\n- Directors called for ambitious, growth friendly adjustments to achieve medium-term fiscal and debt targets, recommending:\n  - further mobilization of non-oil revenue,\n  - strengthening revenue administration and public financial management,\n  - reforming state owned enterprises,\n  - spending rationalization to create fiscal space for public investment and targeted social spending,\n  - commitment to fuel subsidy reforms when conditions allow, and\n  - faster implementation of the cash transfer program.\n- Continued sound debt management is crucial."
    },
    {
      "heading": "Financial sector and governance",
      "content": "- Directors encouraged continued efforts to strengthen financial stability, building on strong previous progress.\n- Need to implement the remaining secondary legislation to fully implement the Financial Institutions Law, including for bank recovery and resolution planning.\n- Directors emphasized adopting a more comprehensive approach to dealing with problem banks and continuing efforts to address nonperforming loans.\n- Directors highlighted the need to bolster human and physical capital, access to private credit, and to strengthen governance, transparency, and the AML/CFT regime to improve the business environment and promote private investment.\n- Encouraged publication of the audited COVID expenditure reports and completion of the anti-corruption strategy.\n- Directors commended the authorities’ focus on building climate resilience and on fostering gender equality."
    },
    {
      "heading": "Executive Board assessment",
      "content": "- Executive Directors agreed with the thrust of the staff appraisal and welcomed the economic recovery in 2022.\n- Given continued vulnerabilities and elevated global uncertainty, Directors encouraged maintaining the reform momentum and diversifying the economy to safeguard macroeconomic stability and ensure inclusive and sustainable growth.\n- It is expected that the next Article IV consultation with Angola will be held on the standard 12-month cycle."
    },
    {
      "heading": "Key statistics and projections (selected)",
      "content": "- Real gross domestic product: 2021 = 1.1; 2022 Prel. = 2.8; 2023 Proj. = 3.5\n- Oil sector (percent change): 2021 = -11.5; 2022 = 2.0; 2023 = 1.2\n- Non-oil sector (percent change): 2021 = 5.3; 2022 = 3.2; 2023 = 4.3\n- Nominal gross domestic product (GDP): 2021 = 42.9; 2022 = 19.1; 2023 = 11.4\n- GDP deflator: 2021 = 41.4; 2022 = 15.8; 2023 = 7.6\n- Non-oil GDP deflator: 2021 = 25.8; 2022 = 21.4; 2023 = 11.7\n- Consumer prices (annual average): 2021 = 27.0; 2022 = 13.8; 2023 = 12.3\n- Gross domestic product (billions of kwanzas): 2021 = 47,226; 2022 = 56,231; 2023 = 62,625\n- Gross domestic product (billions of U.S. dollars): 2021 = 74.8; 2022 = 121.6; 2023 = 118.6\n- Gross domestic product per capita (U.S. dollars): 2021 = 2,168; 2022 = 3,405; 2023 = 3,225\n- Central government total revenue (percent of GDP): 2021 = 23.3; 2022 = 23.5; 2023 = 21.2\n- Total expenditure (percent of GDP): 2021 = 19.5; 2022 = 21.8; 2023 = 21.6\n- Overall fiscal balance (percent of GDP): 2021 = 3.8; 2022 = 1.7; 2023 = -0.4\n- Non-oil primary fiscal balance (percent of GDP): 2021 = -4.7; 2022 = -7.6; 2023 = -7.2\n- Broad money (M2) (end of period, percent change): 2021 = -9.3; 2022 = -4.6; 2023 = 10.3\n- Trade balance (percent of GDP): 2021 = 29.1; 2022 = 26.4; 2023 = 21.7\n- Exports of goods, f.o.b. (percent of GDP): 2021 = 44.9; 2022 = 39.9; 2023 = 35.9\n- Of which: Oil and gas exports (percent of GDP): 2021 = 42.6; 2022 = 38.0; 2023 = 33.8\n- Imports of goods, f.o.b. (percent of GDP): 2021 = 13.5\n- Terms of trade (percent change): 2021 = 52.4; 2022 = 29.3; 2023 = -13.8\n- Current account balance (percent of GDP): 2021 = 11.2; 2022 = 11.0; 2023 = 6.3\n- Gross international reserves (end of period, millions of U.S. dollars): 2021 = 14,375; 2022 = 14,479; 2023 = 14,769\n- Gross international reserves (months of next year's imports): 2021 = 6.6; 2022 = 6.5; 2023 = 6.4\n- Official exchange rate (average, kwanzas per U.S. dollar): 2021 = 631; 2022 = 462\n- Official exchange rate (end of period, kwanzas per U.S. dollar): 2021 = 555; 2022 = 504\n- Public sector debt (gross) (percent of GDP): 2021 = 83.6; 2022 = 66.1; 2023 = 64.1\n- Of which: Central Government debt (percent of GDP): 2021 = 77.6; 2022 = 60.8; 2023 = 59.5\n- Oil and gas production (millions of barrels per day): 2021 = 1.252; 2022 = 1.263; 2023 = 1.295\n- Oil and gas exports (billions of U.S. dollars): 2021 = 31.8; 2022 = 46.2; 2023 = 40.1\n- Angola oil price (average, U.S. dollars per barrel): 2021 = 70.7; 2022 = 97.8; 2023 = 81.6\n- Brent oil price (average, U.S. dollars per barrel): 2021 = 70.8; 2022 = 99.6; 2023 = 83.3\n\nIMF Executive Board concludes 2022 Article IV consultation with Angola; Press Release No. 23/52; February 23, 2023.\n\n---\n\n\n References\n\n- Angola and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/02/23/pr2352-angola-imf-executive-board-concludes-2022-article-iv-consultation-with-angola"
    }
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    "Published: February 23, 2023",
    "Angola’s economy continued to recover from the COVID-19 pandemic in 2022, supported by higher oil prices, improved oil production, and resilient non-oil activity.",
    "Non-oil growth was broad-based despite a challenging external environment.",
    "Growth is estimated at 3.5 percent for 2023.",
    "Overall growth is expected to continue in 2023 and reach about 4 percent in the medium term, as the authorities’ structural reform agenda supports the non-oil sector.",
    "Downside risks to the near-term outlook include a larger-than-expected decline in global oil prices, renewed global food price pressures, and adverse weather conditions that impact the agriculture sector.",
    "Headline inflation declined significantly to 13.8 percent y/y at end-December 2022, driven by lower global food prices, a stronger kwanza, and previous efforts by the central bank to tighten monetary policy.",
    "Inflation should continue its gradually declining path, reaching single digits in 2024.",
    "Directors commended the Banco Nacional de Angola’s (BNA) decisive actions that resulted in a large disinflation in 2022.",
    "Directors recommended a wait and see approach to monetary policy actions to support the disinflationary path, noting that inflation remains elevated and risks to price stability persist.",
    "Directors supported the BNA’s efforts to strengthen policy effectiveness, including by aligning the interbank rate with the policy rate and transitioning toward an inflation targeting framework.",
    "Directors welcomed the authorities’ commitment to exchange rate flexibility and their plan to eliminate the remaining exchange restrictions.",
    "The non-oil primary deficit increased in 2022 following higher-than-budgeted capital expenditure and higher-than-expected fuel subsidy costs.",
    "The public debt-to-GDP ratio fell by an estimated 17.5 percentage points of GDP to an estimated 66.1 percent of GDP, aided by a stronger exchange rate.",
    "The 2023 budget envisions a resumption of fiscal adjustment, which is necessary to approach the authorities’ twin medium-term fiscal and debt targets and guard against debt vulnerabilities.",
    "Directors called for ambitious, growth friendly adjustments to achieve medium-term fiscal and debt targets, recommending:",
    "Continued sound debt management is crucial.",
    "Directors encouraged continued efforts to strengthen financial stability, building on strong previous progress.",
    "Need to implement the remaining secondary legislation to fully implement the Financial Institutions Law, including for bank recovery and resolution planning.",
    "Directors emphasized adopting a more comprehensive approach to dealing with problem banks and continuing efforts to address nonperforming loans.",
    "Directors highlighted the need to bolster human and physical capital, access to private credit, and to strengthen governance, transparency, and the AML/CFT regime to improve the business environment and promote private investment.",
    "Encouraged publication of the audited COVID expenditure reports and completion of the anti-corruption strategy.",
    "Directors commended the authorities’ focus on building climate resilience and on fostering gender equality.",
    "Executive Directors agreed with the thrust of the staff appraisal and welcomed the economic recovery in 2022.",
    "Given continued vulnerabilities and elevated global uncertainty, Directors encouraged maintaining the reform momentum and diversifying the economy to safeguard macroeconomic stability and ensure inclusive and sustainable growth.",
    "It is expected that the next Article IV consultation with Angola will be held on the standard 12-month cycle.",
    "Real gross domestic product: 2021 = 1.1; 2022 Prel. = 2.8; 2023 Proj. = 3.5",
    "Oil sector (percent change): 2021 = -11.5; 2022 = 2.0; 2023 = 1.2",
    "Non-oil sector (percent change): 2021 = 5.3; 2022 = 3.2; 2023 = 4.3",
    "Nominal gross domestic product (GDP): 2021 = 42.9; 2022 = 19.1; 2023 = 11.4",
    "GDP deflator: 2021 = 41.4; 2022 = 15.8; 2023 = 7.6",
    "Non-oil GDP deflator: 2021 = 25.8; 2022 = 21.4; 2023 = 11.7",
    "Consumer prices (annual average): 2021 = 27.0; 2022 = 13.8; 2023 = 12.3",
    "Gross domestic product (billions of kwanzas): 2021 = 47,226; 2022 = 56,231; 2023 = 62,625",
    "Gross domestic product (billions of U.S. dollars): 2021 = 74.8; 2022 = 121.6; 2023 = 118.6",
    "Gross domestic product per capita (U.S. dollars): 2021 = 2,168; 2022 = 3,405; 2023 = 3,225",
    "Central government total revenue (percent of GDP): 2021 = 23.3; 2022 = 23.5; 2023 = 21.2",
    "Total expenditure (percent of GDP): 2021 = 19.5; 2022 = 21.8; 2023 = 21.6",
    "Overall fiscal balance (percent of GDP): 2021 = 3.8; 2022 = 1.7; 2023 = -0.4",
    "Non-oil primary fiscal balance (percent of GDP): 2021 = -4.7; 2022 = -7.6; 2023 = -7.2",
    "Broad money (M2) (end of period, percent change): 2021 = -9.3; 2022 = -4.6; 2023 = 10.3",
    "Trade balance (percent of GDP): 2021 = 29.1; 2022 = 26.4; 2023 = 21.7",
    "Exports of goods, f.o.b. (percent of GDP): 2021 = 44.9; 2022 = 39.9; 2023 = 35.9",
    "Of which: Oil and gas exports (percent of GDP): 2021 = 42.6; 2022 = 38.0; 2023 = 33.8",
    "Imports of goods, f.o.b. (percent of GDP): 2021 = 13.5",
    "Terms of trade (percent change): 2021 = 52.4; 2022 = 29.3; 2023 = -13.8",
    "Current account balance (percent of GDP): 2021 = 11.2; 2022 = 11.0; 2023 = 6.3",
    "Gross international reserves (end of period, millions of U.S. dollars): 2021 = 14,375; 2022 = 14,479; 2023 = 14,769",
    "Gross international reserves (months of next year's imports): 2021 = 6.6; 2022 = 6.5; 2023 = 6.4",
    "Official exchange rate (average, kwanzas per U.S. dollar): 2021 = 631; 2022 = 462",
    "Official exchange rate (end of period, kwanzas per U.S. dollar): 2021 = 555; 2022 = 504",
    "Public sector debt (gross) (percent of GDP): 2021 = 83.6; 2022 = 66.1; 2023 = 64.1",
    "Of which: Central Government debt (percent of GDP): 2021 = 77.6; 2022 = 60.8; 2023 = 59.5",
    "Oil and gas production (millions of barrels per day): 2021 = 1.252; 2022 = 1.263; 2023 = 1.295",
    "Oil and gas exports (billions of U.S. dollars): 2021 = 31.8; 2022 = 46.2; 2023 = 40.1",
    "Angola oil price (average, U.S. dollars per barrel): 2021 = 70.7; 2022 = 97.8; 2023 = 81.6",
    "Brent oil price (average, U.S. dollars per barrel): 2021 = 70.8; 2022 = 99.6; 2023 = 83.3",
    "[Angola and the IMF](http://www.imf.org/external/country/AGO/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
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    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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