Luanda, Aug. 13, 2024 (Lusa) - Banco Millennium Atlântico (BMA) estimated on Tuesday that the Angolan economy will grow by 2.2% in 2024, against the 2.84% estimated by the government. This is justified by the fall in oil production and exports until the end of the year.
According to the Atlantic Economic Outlook 2024 "Economic Recovery in the Face of Geopolitical Challenges and Uncertainties", released today, Angola is expected to grow by 2.2% until December, during which time the non-oil sector is expected to grow by 3.36%.
The reduction in oil production in Angola from 1.080 million barrels/day to 1.060 million in 2024, coupled with the fall in the average price of a barrel of oil from $75 to $65/barrel is expected to lead the fall in exports, the Angolan bank's study says.
For the BMA analysts, the reduction in oil production should also put pressure on international reserves, affect the mobilisation of tax revenues for the state, justify currency depreciation, moderate imports and reduce the possibilities of more robust growth in the non-oil sector.
On the other hand, the analysts point out that the country's growth prospects for 2024 "are positive, above the estimates for the end of 2023".
They point out that the government predicts growth of 2.84%, up from the 0.44% estimated for 2023, while the National Bank of Angola (BNA) predicts growth of 2.2%.
They note that the exchange rate of the kwanza (Angolan currency) in 2023 fell 39.2% against the dollar and 41.3% against the euro, which, coupled with moderate growth in Gross Domestic Product (GDP), "contributed to the public debt to GDP ratio being above 80% again" in 2023.
According to the Atlantic Economic Outlook 2024, the kwanza's exchange rate against the dollar could continue to depreciate, with prospects of oscillating between 850 and 910 dollars, in average terms, until the end of 2024.
"A reduction in exports could pressurise the trend, continued disinvestment in the oil sector, liquidation of external public debt and the need to preserve international reserves," they say.
In this study, the BMA analysts also consider that the increase in the Angolan state's gross financing needs in the 2024 General State Budget "could reduce the budget's ability to release liquidity to the economy and justify a low level of public investment spending in the period in question."
They emphasise that this scenario could be aggravated by a "tighter" external financing context, justified by the "reticence" of the central banks of the major economies - the US Federal Reserve, the European Central Bank and the Bank of England - to reduce benchmark interest rates and a context of lower oil production and prices.
Atlantic Research also projects that the inflation rate will accelerate from 20.01% in 2023 to close to 24% in 2023 due to the challenges of domestic supply, the introduction of more restrictive customs measures on imports, and indications that production will continue to reduce fuel subsidies.
The analysis added that the trend could boost yields on public debt securities in a context in which monetary policy is expected to remain restrictive.
The BMA analysts also noted that to moderate the inflationary trend, the Angolan central bank may reinforce the restrictive monetary policy that began in November 2023. It will seek to ensure a more transparent and predictable exchange rate policy to give greater independence and efficiency to the foreign exchange market.
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