"We think that policy makers in Angola will start a cycle of monetary tightening on Monday, increasing the policy rate by 100 basis points, to 16.5 percent", reads a note sent to clients, and the one that Lusa had access.
Capital Economics analysts argue that "inflation increased from 16.6 percent in November to 17.1 percent in December, and price pressure is expected to continue to accumulate in the coming months because the kwanza's sharp decline in the year past promotes rising prices for imported goods ".
Thus, they add, "the National Bank of Angola is likely to respond by raising interest rates to a total of 400 basis points during this year", which would raise the key interest rate to 20.5 percent.
"This rate hike is one of the main reasons for our forecast, outside the consensus of analysts, of a new economic recession this year in Angola, with GDP falling for the fifth consecutive year", the note also reads.
