Angola: Economic sentiment continues to slide in the third quarter
The economic climate indicator (ICE, Indicador de Clima Económico) published by the Statistical Institute fell from minus 15 points in the second quarter to a one-year low of minus 16 points in the third quarter. The result marked the second consecutive quarter of deterioration and reflected sustained headwinds to recovery as Angola struggles to emerge from recession that has battered the economy since the collapse in oil prices in 2014.
The third-quarter deterioration was driven by weaker sentiment in the commercial, transport and communications sectors, which more than offset improved confidence in the manufacturing, extractive, tourism and construction sectors. Overall, just two out of seven surveyed sectors—namely communications and transport—were in positive territory in Q3. Nevertheless, sentiment in all seven sectors remained below their respective long-term average levels, with confidence in the all-important commercial and manufacturing sectors particularly deeply entrenched in negative territory.
Looking ahead, financial and policy support from the IMF, coupled with higher oil prices and a loan from China’s Development Bank, should prop up the recovery next year, although the outlook remains highly uncertain. Political willingness to continue implementing structural reforms, still-burgeoning corruption, the depreciation of the currency and ballooning national debt are key downside risks to the outlook.