A much more optimistic scenario than that of the government, which assumed an average oil price of 39 dollars for this year, representing a deficit of 2.2 percent.
In a note, quoted by the Jornal Económico, the consulting firm recalls that cuts in oil production levels will continue next month and explains that this decision, determined last Thursday by the Organization of the Petroleum Exporting Countries (OPEC) and partners, will have consequences in the market.
The oil market expected production levels to increase, however, as this will not happen and oil supply will remain constrained, the price will appreciate.
Eaglestone also considers that this decision "was not only a surprise" but also indicates "that the world market will be more constrained in the coming months."
Since the end of 2020, the average price of oil has risen by about 30 percent. According to the consultancy, in January and February 2021, the price was around $58. However, the expectation is that the value will continue to rise. This increase, according to Eaglestone relates to the cuts that OPEC+ has been adopting.
"Meanwhile, investors are increasingly optimistic about the evolution of the oil price, with the growth in demand likely to exceed the level of supply that OPEC+ may restore to the market," can be read in the note signed by Tiago Bossa Dionísio.
Despite the optimistic scenarios, the consultancy warns that the forecasts are far from reaching a consensus, indicating that current projections indicate that the average price will be slightly below $65 by 2025.
Once the analysis is done, the consulting firm concludes that even in the face of cautious forecasts, the Angolan balance could end up being positive. "The conclusion is clear: the Angolan government could register a budget surplus in 2021 (for the same level of expenses already assumed in the OGE) if the price of oil remains at current levels," he pointed out.
Eaglestone explains that, for example, "if the average price of crude reaches 60 dollars this year then the Government would register a surplus representing 3 percent of the GDP. Remember that the current budget foresees a deficit of 2.2 percent of GDP assuming an average price of 39 dollars.
He said that Angola continues to focus on economic reforms in order to achieve financial stability and sustainable economic growth.
"Despite this, public debt remains very high, with this ratio reaching more than 130 percent of GDP in 2020. This reflects the sharp depreciation of the kwanza in recent years (more than 80 percent of public debt is denominated in or indexed to foreign currency) and the recession since 2016," he stressed.
However, not everything is bad news, and despite the continued decrease in oil production "the outlook for its price is positive news for Angola, as it helps the country's economic recovery and public accounts, while the recent stabilization of the kwanza should contribute to debt sustainability."
He concludes by admitting that the ratings in the main rating agencies are still far from improving, but that "even so, the government should take advantage of the enormous help that a higher oil price should bring in the coming months."
