Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Angola.
Angola’s economy recovered in 2024 as the oil sector rebounded. GDP growth is estimated to have reached 3.8 percent, surpassing earlier projections, and the recovery broadened to the non-oil sector. The public debt-to-GDP ratio declined in 2024, benefiting from higher nominal GDP growth and sustained primary surpluses. However, fiscal consolidation efforts waned, and buffers built during the 2018–21 EFF—supported program are being eroded by fiscal slippages from higher capital expenditures and a slower fuel subsidy reform.
Inflation remained elevated driven by exchange rate pressures and higher food prices. The central bank raised monetary policy rate by 150 bps in 2024 and streamlined liquidity management, resulting in a better alignment of the interbank rate with the policy rate. The currency depreciated by over 10 percent against the U.S. dollar in 2024. Adverse market expectations and a high external debt service continue to weigh on the exchange rate. The government's active cash and debt management helped mitigate liquidity pressures.
The recovery is expected to continue but risks to the outlook remain high. Growth is expected to remain at 3 percent in 2025 while inflation is projected to ease with the fading of cost-push factors. The resolution of maintenance bottlenecks in key extraction blocks and government-led efforts to incentivize production should help sustain oil production. However, high external debt service constrains development spending, and oil dependence remains a drag on sustainable growth. Liquidity risk could intensify should financing conditions deteriorate, further crowding out social spending, and exerting pressures on the exchange rate. Moreover, with presidential elections scheduled for 2027, an early start of the political cycle risks slowing down the implementation of economic reforms. On the upside, higher oil prices, positive spillovers from further global monetary policy easing, and stronger non-oil FDIs, including through the Lobito Corridor development, could improve the medium-term outlook.
Executive Board Assessment[2]
“Executive Directors agreed with the thrust of the staff appraisal. While welcoming the economic recovery, they highlighted the continued risks from oil price volatility and debt vulnerabilities. Against this background, Directors emphasized the urgency of accelerating structural reforms to strengthen macroeconomic and financial stability and foster diversified and inclusive growth.
“Directors stressed that returning to a fiscal consolidation path is critical to strengthen buffers and create space for development needs. They emphasized the importance of fully implementing fuel subsidy reforms accompanied by mitigating measures to protect the most vulnerable and intensifying non‑oil revenue mobilization efforts. Directors also advised rationalizing public investment and improving spending efficiency in line with the 2019 PIMA recommendations, strengthening public financial management, including the procurement framework and SOE reforms, and improving cash and debt management to mitigate liquidity risks and support a timely return to markets.
“Directors stressed the need for monetary policy to maintain a tightening bias to ensure durable disinflation. They called on the authorities to strictly adhere to the ceiling on government loans to safeguard international reserves and contain inflationary pressures. Directors welcomed the authorities’ efforts to streamline liquidity management to enhance monetary policy transmission, as well as to improve foreign exchange market functioning and exchange rate flexibility as part of the transition toward an inflation‑targeting framework.
“Directors underlined the need to continue addressing financial sector vulnerabilities. They called on the authorities to address AML/CFT weaknesses to achieve swift removal from the FATF grey list. Directors emphasized the importance of effectively implementing new supervisory regulations and developing a robust financial stability framework, including strengthened safety nets. They advised addressing remaining vulnerabilities from the sovereign‑bank nexus, high NPLs, and problem banks, and looked forward to the upcoming FSAP assessment.
“Directors supported the authorities’ National Development Plan to achieve more diversified and resilient growth. A key focus should be on market‑friendly policies to streamline business regulations, enhance governance, fight corruption, develop human capital, and deepen financial inclusion. Stronger statistical capacity is also needed to support sound policy making.
It is expected that the next Article IV consultation with Angola will be held on the standard 12‑month cycle.”
|
Angola: Selected Economic Indicators, 2023–25 |
|||
|
|
2023 |
2024 |
2025 |
|
|
Prel. |
Proj. |
|
|
Real economy (percent change, except where otherwise indicated) |
|||
|
Real gross domestic product |
1.0 |
3.8 |
3.0 |
|
Oil sector |
-2.4 |
3.2 |
0.3 |
|
Non-oil sector |
2.2 |
3.9 |
3.4 |
|
Nominal gross domestic product (GDP) |
14.6 |
33.3 |
24.3 |
|
Oil sector |
9.5 |
33.7 |
17.4 |
|
Non-oil sector |
15.5 |
33.2 |
25.6 |
|
GDP deflator |
13.4 |
28.5 |
20.8 |
|
Non-oil GDP deflator |
14.4 |
28.2 |
21.3 |
|
Consumer prices (annual average) |
13.6 |
28.2 |
21.0 |
|
Consumer prices (end of period) |
20.0 |
27.5 |
18.9 |
|
|
|||
|
Central government (percent of GDP) |
|||
|
Total revenue |
17.4 |
16.6 |
16.0 |
|
Of which: Oil-related |
10.3 |
10.0 |
9.7 |
|
Of which: Non-oil tax |
6.1 |
5.6 |
5.0 |
|
Total expenditure |
19.2 |
17.6 |
17.3 |
|
Current expenditure |
15.2 |
14.1 |
12.4 |
|
Capital spending |
4.1 |
3.6 |
4.9 |
|
Overall fiscal balance |
-1.9 |
-1.0 |
-1.3 |
|
Non-oil primary fiscal balance |
-6.4 |
-5.7 |
-7.2 |
|
|
|||
|
Money and credit (end of period, percent change) |
|||
|
Broad money (M2) |
37.8 |
30.6 |
38.5 |
|
Percent of GDP |
20.8 |
20.4 |
22.7 |
|
Velocity (GDP/M2) |
4.8 |
4.9 |
4.4 |
|
Velocity (non-oil GDP/M2) |
4.1 |
4.1 |
3.8 |
|
Credit to the private sector (annual percent change) |
28.8 |
28.1 |
27.0 |
|
|
|||
|
Balance of payments |
|||
|
Trade balance (percent of GDP) |
19.9 |
19.7 |
17.0 |
|
Exports of goods, f.o.b. (percent of GDP) |
33.6 |
33.1 |
31.5 |
|
Of which: Oil and gas exports (percent of GDP) |
31.6 |
30.9 |
28.6 |
|
Imports of goods, f.o.b. (percent of GDP) |
13.8 |
13.4 |
14.5 |
|
Terms of trade (percent change) |
-19.3 |
-4.0 |
-10.4 |
|
Current account balance (percent of GDP) |
3.8 |
4.1 |
2.4 |
|
Gross international reserves (end of period, millions of U.S. dollars) |
14,727 |
15,227 |
15,277 |
|
Gross international reserves (months of next year's imports) |
7.3 |
7.3 |
7.3 |
|
|
|||
|
Exchange rate |
|||
|
Official exchange rate (average, kwanzas per U.S. dollar) |
685 |
876 |
… |
|
Official exchange rate (end of period, kwanzas per U.S. dollar) |
829 |
924 |
… |
|
|
|||
|
Public debt (percent of GDP) |
|||
|
Public sector debt (gross)1 |
71.4 |
62.4 |
63.3 |
|
Of which: Central Government debt |
67.9 |
60.4 |
61.9 |
|
|
|||
|
Oil |
|||
|
Oil and gas production (millions of barrels per day) |
1.205 |
1.262 |
1.266 |
|
Oil and gas exports (billions of U.S. dollars) |
34.7 |
35.4 |
31.5 |
|
Angola oil price (average, U.S. dollars per barrel) |
80.6 |
78.5 |
70.3 |
|
Brent oil price (average, U.S. dollars per barrel) |
82.3 |
80.0 |
71.4 |
|
Sources: Angolan authorities; and IMF staff estimates and projections. |
|||
|
1 Includes debt of the Central Government, external debt of state oil company Sonangol and state airline company TAAG, and guaranteed debt. |
|||
[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summing up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.
