"For 2024, our perspective is that inflation will continue above 20 percent, still accelerating during part of the year, before slowing down again. On the one hand, we hope that there may still be some depreciation movement in the first quarter of 2024, factor that will contribute to higher inflation; on the other hand, it is possible that there will be more movements to remove fuel subsidies and that energy costs will increase", write the analysts.
In the most recent informative note on the Angolan economy, sent to customers and to which Lusa had access, BFA says that the effect of these factors "should keep inflation above 20 percent for much of the year", therefore, its estimate "points to inflation ending 2024 close to 24 percent" and that there will be no easing of monetary policy in the near future, with a further increase in interest rates being possible in the first half of next year.
The fight against inflation "is expected to continue for a long period and the objective of single-digit inflation will again not be achieved for at least the next two years", say analysts.
The reasons they point out are "oil prices not returning to levels above 90 dollars, a limited growth in oil production, but above all the Ministry of Finance under pressure with high foreign currency amortizations in the short and medium term", which will continue "to there is pressure on the foreign exchange market which will be reflected in equally pressured inflation as well".
Prices in Luanda increased by 20.4 percent in October compared to the same month of 2022, almost four percentage points above the national average, which makes the BFA expect that, in the coming months, inflation in the provinces will accelerate to close to these values.
For BFA economists, an increase in interest rates is also to be expected, not only reference rates, but also interbank rates, customer credit and interest on public debt.
"The decision of the Monetary Policy Committee at the last meeting [increasing the key rate from 18 to 19 percent] is a prelude to this movement", points out in the informative note, which highlights that "interest rates for longer maturities in the interbank market already started to rise and reversed the trend around mid-October".
