"Severe economic turmoil is expected in the coming months due to the rapid spread of Covid-19, which is increasingly weighing on foreign and domestic economic activity, thus keeping crude prices low," analysts write in this month's report on African economies.
In the document, which was sent to clients and to which Lusa had access, the consultant warned that "the authorities have few options to support the national currency, as foreign reserves are under pressure and central bank interest rates are among the highest in the region".
The consultant's analysts cut the forecast for the economy's evolution this year by 1.6 percentage points, from a growth of 0.4 per cent to a recession of 1.2 per cent for the fifth consecutive year.
"The outlook for developments worsened sharply in March, with no economic recovery expected until 2021; the contagion effects of the weakened oil sector in the context of low prices and low local production should reverberate across all sectors of the economy, and the economic crisis may delay structural economic reforms," the consultants warn.
Inflation is expected to rise to 20.2 percent this year and the central bank's reference interest rate is expected to stand at 16.3 percent by the end of the year, FocusEconomics estimates, which estimates that 551.7 kwanzas are needed for every dollar in 2020.