## Post Financing Assessment (PFA) Consultation with Angola _IMF News, July 3, 2024_ ## Source details **Canonical URL:** [Post Financing Assessment (PFA) Consultation with Angola](https://www.imf.org/en/news/articles/2024/07/03/pr-24260-angola-post-financing-assessment-pfa-consultation) ## Other formats - [Markdown version](/en/news/articles/2024/07/03/pr-24260-angola-post-financing-assessment-pfa-consultation/index.md) - [Structured JSON version](/en/news/articles/2024/07/03/pr-24260-angola-post-financing-assessment-pfa-consultation/index.json) - [Bundle manifest](/en/news/articles/2024/07/03/pr-24260-angola-post-financing-assessment-pfa-consultation/bundle-manifest.json) ## Bibliographic details - 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.* --- ## References - [Angola and the IMF](http://www.imf.org/external/country/AGO/index.htm) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [IMF lending program](https://www.imf.org/en/About/Factsheets/IMF-Lending) - [here](https://www.imf.org/en/About/Factsheets/Sheets/2023/Post-Financing-Assessment-PFA) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2024/07/03/pr-24260-angola-post-financing-assessment-pfa-consultation_