Budget to lift Angola out of recession this year and forecast 2.4 percent growth in 2022

According to the proposal approved by the National Assembly on November 9, the country is expected to return to positive growth this year, after five consecutive years of economic recession, triggered by the drop in oil prices in 2016, and, more recently, by the consequences of the covid-19 pandemic.

In the document, the Ministry of Finance foresees that in 2022 the economy will grow 2.4 percent in 2022 and expects a sharp decline in the ratio of public debt to Gross Domestic Product, which rose in recent years due, in part, to the devaluation of the kwanza.

With the national currency appreciating nearly 10 percent from January to September this year, the debt ratio is expected to drop to around 82 percent by the end of this year, allowing Angola to keep its intention of returning to international debt markets. in 2022, as announced by the finance minister last week.

The "expansionist policy" assumed by the Government maintains, however, the concern with the sustainability of public finances, since practically half of the revenues are destined to guarantee the payment of interest on the debt next year, totaling 3,020.9 billion of kwanzas, which represent 12 percent of GDP.

The exit from the recession this year, if confirmed, will be sustained by the growth of the non-oil economy, which is expected to expand by 5.2 percent, as the oil economy is expected to remain negative, reducing by 10, 6 percent, according to Government forecasts.

The reference price for oil next year was set at 59 dollars per barrel, an admittedly "conservative" perspective and which will allow the Government, as has been the habit in recent years, to have more revenue than what is foreseen in the document, which helps to ensure that the budget balance is positive.

Angola is expected to produce 1.148 million barrels per day, 18 thousand barrels more per day than the 1.130 million barrels forecast for the 2021 average.

In the 2022 Budget, the Government assumes as priorities the fight against the pandemic, the control of the debt, the recovery of the economy and the strengthening of public investment, and points out as the main risks to the budget execution the evolution of the global economy, the oil price, a slowdown in the non-oil economy, the exchange rate and lower-than-expected oil production.

About vaccination, essential to ensure a return to normality, the forecast points to the vaccination of 60 percent of the eligible population by the end of this year, a percentage that should rise to 95 percent by the end of next year.