IMF Staff Country Reports

The 2023 Article IV Consultation discusses that Angola’s economic recovery in 2021/22 was nearly halted in 2023 by a double shock in the first half of the year, as the oil sector weakened, and the debt moratorium ended. Growth is estimated at 0.5 percent for 2023, with an estimated contraction in the oil sector of 6.1 percent and softened non-oil growth at 2.9 percent. Economic growth is projected to recover in the near-term, supported by improved oil production and the recovery in the non-oil sector. Inflation is expected to remain temporarily elevated in 2024 and to gradually decline thereafter, as the effects of the subsidy removal and the pass-through from nominal exchange rate depreciation diminish. The recent monetary policy tightening is welcomed, while further improvements to monetary operations are required, including aligning the interbank market interest rate with the announced policy rate. The central bank (BNA) and the ministry of finance should coordinate money market operations to align interbank liquidity conditions with the announced interest rate corridor while fiscal domestic financing is undertaken through medium- to long-term issuances. The BNA should also continue its transition toward an inflation-targeting framework and greater exchange rate flexibility.