"Inflation jumped to more than 20 percent for the first time since August 2022; the continued rise in the price of food and drinks still reflects the adverse impact of the devaluation of the kwanza in May and June 2023, and is expected to continue to rise during the first half of this year", write analysts from the African department of British consultancy Oxford Economics.
In a comment on the December figures, which show a year-on-year increase of 20.0 percent, analysts recall the acceleration compared to the 18.2 percent growth recorded in November last year, compared to the same period of the previous year, and they emphasize that there was also an increase in December (2.4 percent) compared to November, when the increase was 2.2 percent.
"The strong weakness of the currency since May, with the kwanza trading close to its worst value ever, at 833 kwanzas per dollar, has led to a resurgence in food inflation, coupled with the fact that the reduction in fuel subsidies has begun putting pressure on transport prices, taking inflation to the highest value since August 2022", say the analysts in the note to which Lusa had access.
For Oxford Economics, the National Bank of Angola is expected to maintain the exchange rate between 830 and 845 kwanzas per dollar until the end of this year, with inflation rising to more than 23 percent at the end of the first half of the year due to the effects of exchange rate on the import of consumer goods.
"Our inflation forecast shows that inflation will increase from an average of 13.6 percent in 2023 to 21.3 percent in 2024," they write, arguing that "the BNA has been reluctant to raise interest rates since the kwanza 'crash' due to the weakness of the national economy, with interest rates only increasing by 100 basis points since November".
Even so, they conclude, the forecast is for an increase of another 150 basis points this semester, "based on the analysis that inflation will continue to rise and that there will be a modest economic recovery in this period".
