World Bank: Angola comes out of recession and grows 0.4 percent this year

"Angola is expected to grow 0.4 percent in 2021 and 3.1 percent in 2022, after five consecutive years of recession, but the country is still struggling to gain steam, with high debt levels and weak industry performance. oil industry", reads the report "The Pulsar of Africa", released in the context of the Annual Meetings of the World Bank and the International Monetary Fund (IMF), which are taking place until the end of this week in Washington.

In the document, the World Bank - unlike the IMF, which forecasts a 0.7 percent recession for Angola - says that the biggest African economies will come out of recession this year, although growing at different levels, but all with great difficulties to support businesses and individuals to overcome the covid-19 pandemic.

"Due to limited budget space, African countries have not been able to inject the necessary levels of resources to launch a vigorous policy response to covid-19," the bank says in its annual report on sub-Saharan Africa, noting that budget support was 2.8 percent on average, compared with 17 percent disbursed by financial authorities in advanced countries.

Some countries, including Angola, "were forced to apply austerity measures when the debt became unsustainable" and, in the case of Mozambique as well, public finances deteriorated because "they were already vulnerable even before the pandemic".

Oil, note World Bank economists, "allowed Angola to engage in large-scale lending operations, but the debt-to-GDP [Gross Domestic Product] ratio grew strongly as oil prices rose and the currency devalued , peaking at 134 percent of GDP last year."

Debt, they warn, "remains a medium-term concern, despite a partial rescheduling of external debt service, including through the Debt Service Suspension Initiative (DSSI)," launched in April 2020 to help most vulnerable countries.