"Mainly due to the fall in Angola's oil prices this year, almost 70 percent by the end of May, and foreign exchange liberalization, the kwanza has lost about 20 percent of its value since the beginning of the year; it passed the 600 kwanzas per dollar barrier slightly in June, but has recovered due to rising oil prices in recent weeks, but the local currency remains vulnerable to changes in global sentiment and is expected to depreciate by more than 50 percent in 2020 compared to last year," writes analyst Gerrit van Rooyen.
In a note on inflation in Angola, which reached its highest level since January 2018, sent to customers in June and to which Lusa has had access, Oxford Economics anticipates that "the depreciation will continue to put upward pressure on consumer prices, due to the strong dependence on imported goods.
In addition, the analyst concludes, "the implementation of the 14 per cent VAT, as well as the increase in university fees, will continue to put pressure on inflation".
Prices in Angola rose 1.74 percent between May and June, according to a monthly report from the National Statistics Institute (INE), released on Monday, a figure that places 12-month accumulated inflation at its highest since January 2018.
According to the National Consumer Price Index (CPI) Quick Information Sheet, the change in the last 12 months - between July 2019 and June this year - stands at 22.62 per cent, the highest accumulated value since January 2018, when this indicator reached 22.72 per cent.
In early May, the Oxford Economics consultancy announced that Angola's economy will experience negative growth of 2.8 percent this year due not only to the pandemic, but also to the fall in oil prices since March.
On Tuesday, the parliament voted, in general, on the revised General State Budget (GSB) 2020 proposal, estimated at 13.5 billion kwanzas.
The revised 2020 State Budget proposal foresees a deficit of 4 percent to the 15 billion kwanzas of the previous proposal and with an average price of a barrel of oil of $33.
The first version had been drawn up based on an average oil price of $55 a barrel, an average daily production of 1,436,900 barrels and an inflation rate of 25 percent.
Due to the covid-19 pandemic there was a reduction in the price of a barrel of oil, which led the member states of the Organization of Petroleum Exporting Countries and their partners to reduce production in order to balance the price of a barrel of oil.