João Lourenço stated in his message to the National Assembly about the proposal for the General State Budget for 2024 (OGE-2024), read by the Minister of State for Economic Coordination, José de Lima Massano, that, next year, the non-oil sector is expected to grow by around 4.6 percent, with global Gross Domestic Product (GDP) expected to grow by 2.8 percent, due to the negative impact of the oil sector, which is expected to decline by 2.5 percent.
Regarding inflation, it is expected to ease in 2024, but it should still remain above single digits, as relevant structural reforms will continue, including the progressive use of operational subsidies and price subsidies.
The head of state highlighted that the global economy continues its recovery in 2023 at a relatively slow pace and inflation, although on a downward trend, remains at levels above the targets set by the central banks of the largest economies.
“The adoption of more restrictive monetary policies resulted in the worsening of reference interest rates in international markets and resulted in an increase in the country's financial responsibilities and the unfeasibility of contracting new external financing”, said João Lourenço, adding that internally the The decrease in oil production in the first nine months of the current year compared to that predicted in the 2023 OGE, resulted in lower tax revenue than projected.
According to the President, the factors described led to a reduction in the availability of foreign exchange resources, causing significant pressure on the kwanza against the main exchange currencies in international markets, also aggravating the treasury's charges in national currency, given that part of these liabilities are indexed to the US dollar.
Despite the beginning of the partial reduction in fuel subsidies, continued João Lourenço, it is estimated that the cost to public accounts in the current year will be double the value included in the 2023 OGE, “clearly an unsustainable value”.
“This entire adverse context led to lower-than-expected economic growth, resulting in a reduced supply of goods, increased prices, increased costs and a reduction in tax revenue,” he said.
João Loureço declared that the current economic situation also forced the limitation of public spending, particularly those related to investments dependent on ordinary treasury resources, suffering a negative impact on the development of the private sector and the living conditions of Angolans, having, however, support was ensured for the most vulnerable.
This Wednesday, the National Assembly is discussing for a vote, in general, the OGE proposal for the 2024 economic year, with revenues and expenses estimated at 24.7 billion kwanzas.
