"We forecast real GDP to contract by 0.7 percent in 2023, after expanding by 3.1 percent in 2022, which is a downward revision from our previous forecast of 1.8 percent", reads a note sent to investors, to which Lusa had access.
In reviewing the prospects for the evolution of the Angolan economy, the analysts explain that "this review largely reflects the impact of the strong devaluation of the kwanza in June", and add that "the increase in inflation will impact on household consumption and business investment , which puts even more downward pressure on economic activity in the oil sector".
BMI, formerly known as Fitch Solutions, owned by the same owners of the financial rating agency Fitch Ratings, is one of the first consultants to assume the forecasts that Angola may return to the negative growth it faced between 2016 and 2021, prompting the intervention of the International Monetary Fund.
"As we did not foresee that growth would slow down to less than 1 percent [in the second quarter] and because of the strong devaluation of the kwanza, which fell 39.6 percent in June alone, and the inflationary impact, we now foresee that there will be a contraction of 0.7 percent in real GDP, worse than our previous estimate of 1.8 percent growth," they write.
The bad news continues in terms of inflation and oil production, with the BMI predicting an acceleration in inflation from 11 percent to 15 percent, reaching 17 percent at the end of the year compared to the same period last year, and with oil production falling 2.4 percent, which, combined with the 19.2 percent drop in the price of a barrel, to 80 dollars in 2023, "will increase the impact of the drop in oil production".
Looking to 2024, the BMI forecast points to a return to growth of 0.6 percent "due to the slight recovery in oil prices, which will rise 2.4 percent to 83 dollars per barrel, and the slowdown in the fall of domestic production", to 1.7 percent.
Although inflation will still rise to 18 percent next year as a result of cuts in fuel subsidies, analysts estimate that Angola will grow by 1.9 percent in 2024.
