Angola Economic Outlook
August 25, 2020The economic recession is expected to have intensified in the second quarter at the hands of Covid-19 and associated containment measures. Domestic restrictions weighed on activity at home and the unemployment rate ticked up further from the previous quarter, suggesting household consumption took a hit. Moreover, the pandemic subdued oil prices in Q2 as demand for the commodity was hammered, compounding tightened supply amid the OPEC+ production cut deal. Consequently, government finances suffered, with the risk of default continuing to loom and reduced space for further stimulus to spur activity. Turning to the third quarter, early prospects are somewhat downbeat, with Cabinda oil output falling to an over-15-year low in July amid the OPEC+ deal and prices remaining depressed. Moreover, stricter containment measures in two provinces are to remain in place until early September, weighing on activity.
Angola Economic GrowthThe recession is forecast to deepen this year due to the global pandemic. Domestic containment measures will further depress household consumption and capital expenditure, while foreign lockdowns will hit the external sector through subdued oil demand, driving down prices. The risk of default threatening macroeconomic stability further clouds the outlook. FocusEconomics panelists see GDP shrinking 4.3% this year, which is down 0.4 percentage points from last month’s forecast. In 2021, the economy is seen expanding 0.5%.
Angola Economy Data
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Angola Economic News
August 24, 2020
On 21 August, the Angolan kwanza traded at AOA 589.0 per USD. This marked a 5.4% month-on-month depreciation, while the currency was down a staggering 38.9% year-on-year and 18.7% year-to-date. The steep depreciation reflected the twin impact of Covid-19 and low oil prices, which are dealing a blow to government finances and hurting investor sentiment.
August 19, 2020
On average, Angola’s Cabinda crude oil sold at USD 44.3 per barrel (pb) in July, up from June’s USD 41.1 pb, as demand and supply conditions continued to improve.
August 12, 2020
Consumer prices in the Luanda province increased 1.83% in July over the previous month, accelerating from the 1.70% increase recorded in June.
August 10, 2020
The economic sentiment index came in at minus 21.0 in the second quarter, down from the first quarter’s minus 15.0.
July 17, 2020
The economy remained in recession in the first quarter, and the downturn is expected to have intensified in the second quarter amid the full fallout from the global pandemic.