Ver Angola


Standard Bank: Covid-19 outbreak may force Angola to review State Budget

The economic research office of Standard Bank considered this Thursday that the fall in oil prices due to the Covid-19 outbreak may force the Government to review the State Budget.

: Modamo

"The price of a barrel of crude has dropped to around 56 dollars per barrel, closer to the 55 used by the Angolan government in drawing up the budget for this year; if the situation worsens we will not rule out a budget review to ensure that the budget balance is zero," write the analysts.

According to the most recent report on African economies, sent to investors and to which Lusa had access, Angola is one of the countries with the closest relationship with China, and therefore "is not immune to the negative impacts that the outbreak should have globally".

Standard Bank analysts point out that China's sales to Angola accounted for 13.3 percent of total imports, and oil sales to the Asian giant were worth almost 70 percent of the total.

"In the second quarter of last year Angola's sovereign debt to China accounted for 47 percent of total foreign debt; the uncertainty about the impact of the virus' spread has already affected oil prices and has the potential to further depress the Angolan economy," the analysts warn.

The risks on these forecasts, moreover, are downward, as the decline in oil production increases the risk of postponing recovery: "We remain in doubt as to whether oil production will stabilize at current levels, around 1.4 million barrels per day, or whether it will fall further in the old fields due to the fall in production and slow progress in investments," they say, concluding that, "in any case, for the time being the forecast of 1.4 percent growth in the economy is maintained this year.


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