Angola: Economy likely to contract in 2019-2020, expected to rise in 2021-2023

Angola is likely to witness its economy contracting in 2019 and 2020 with negative rates of 1.9 percent before getting back to positive values in the year between 2021 and 2023.

The Economist Intelligence Unit has released the reports claiming that Angola’s economy will augment at an annual average of 6.3 percent with a maximum rate of 7 percent in 2021 and a minimum of 5.9 percent in 2023. The low oil price in current year and next year will continue to have a negative influence on the country’s economy, but the positive fact is that it is take the rising slope between 2021 and 2023.

The poor domestic economy added with appreciation of the US dollar and weak investor appreciation of emerging markets will continue to weigh on the kwanza in the current year that is likely to depreciate. However, The Economist Intelligence Unit’s reports mentioned that activities will continue to be dependent on developments in the oil sector despite efforts to diversify the economy, Macauhub elaborated.

Inflation is further likely to stay high during the period under review in the document, 2019, ranging from a high of 24.3 percent to a low of 11.4 percent in 2023. This is expected due to the continued weakness of the currency, and most importantly the majority of consumer goods are imported and paid for in foreign currency. In such scenario, the government of Angola is contemplating to increase tax revenue and reduce public spending by introducing new taxes like VAT and eliminating a set of subsidies programmes.

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