"Angola's ability to repay [the loan] to the Fund is adequate, although subject to risks; the country remained resilient in the face of significant challenges in 2023, including a reduction in oil production and prices", reads the analysis Angolan economy, released this Thursday under the post-financial assistance program evaluation, which lasted from 2018 to 2021 and had a financial envelope of 4.5 billion dollars.
According to the IMF, "the authorities' efforts to maintain economic reforms begun during the financial assistance program, including in the areas of fiscal management, revenue mobilization, debt management, monetary policy and financial stability, have helped boost resilience of the Angolan economy".
Thus, the Fund points out that economic growth remained positive in 2023, a year in which the economy grew 0.9 percent, thanks to the recovery in oil production in the last quarter of the year, and should stabilize at an expansion of 3.2 percent in the medium term as long as the Government maintains ongoing structural reforms and the diversification agenda.
For IMF management, despite inflation having "reached the highest level in recent years, due to currency depreciation and supply restrictions, price increases should begin to fall in the second half of this year, with better transmission of monetary policy [to the real economy] and with the fading of supply shocks".
In the analysis, the IMF predicts that inflation will improve from 25.7 percent this year to 16.3 percent in 2025, following a downward trend that also applies to the debt-to-GDP ratio, which should fall from 74 percent last year to 58.5 percent and 52.1 percent this and next year, respectively.
Among the recommendations, the IMF points out that Angola must maintain fiscal adjustment, rationalizing spending and points out that it is essential to "continue with the reform of fuel subsidies, with mitigation of measures to support the vulnerable, and a proactive communication strategy".
Furthermore, "coordination between the Ministry of Finance and the National Bank of Angola in financial market operations is essential for the management of interbank liquidity and would help improve price and budgetary stability", highlights the IMF, concluding that improving financial stability and "implementing a broad set of structural reforms is vital to improving the business environment and maintaining growth, in the context of a long-term oil decline".
