"We have revised Angola's GDP growth estimate downwards from a contraction of 4 percent to 4.4 percent, following the release of economic data for the third quarter, and we expect an increase in oil exports, which will bring Angola out of the five-year recession in 2021, contributing to moderate GDP growth of 1.7 percent," write the analysts.
In a note sent to investors and accessed by Lusa, these consultants from Fitch Solutions, owned by the same owners as the financial ratings agency Fitch Ratings, write that "nevertheless, high inflation and unemployment, together with the likely persistence of the pandemic and restrictions on social withdrawal over the next few months, will limit investment and private consumption, affecting recovery.
GDP, they say, "is expected to have contracted even more than the 5.8 percent of the third quarter of 2020, mainly due to cuts in oil production, which continue to impact the sector.
For 2022, Fitch Solutions anticipates an acceleration of growth to 3.1 per cent, based "on more robust export growth and recovery in domestic demand.
Angola's economy recorded the first improvement in GDP since the beginning of the pandemic, with a chain increase of 2.7 percent in the third quarter, but maintained a drop of 5.8 percent over the same period, according to INE.
"The Gross Domestic Product (GDP) in chain volume in the third quarter of 2020 compared to the third quarter of the previous year, seasonally adjusted, posted a drop of 5.8 percent, and in comparison to the previous quarter posted growth of 2.7 percent," reads the note published by the National Statistics Institute.
Despite the improvement over the previous quarter, the national economy continues to contract, as it recorded a negative change over the growth of the same quarter of 2019, and is heading for a contraction of 5 percent in 2020 if the average continues from October to December, for which data are not yet available.
Looking at the average for the first three quarters of 2020, Angola's economy fell 0.9 percent in the first three months of last year, and then worsened the drop to 8.3 percent and 5.8 percent in the following two quarters, which keeps the country in negative territory.
According to data presented in the Quarterly Accounts Press Release, in 2019 GDP fell 2.1 percent and for 2020 the International Monetary Fund predicts a contraction of 4 percent, expecting a return to positive territory this year, with growth of over 3 percent.
