Angola: Economic sentiment sours in Q1
July 6, 2020
The economic climate indicator (ICE, Indicator de Clima Económico) dropped to minus 16 in the first quarter from minus 4 in the fourth quarter of last year. The print marked the lowest reading since Q3 2018 and highlights that the economic backdrop deteriorated with the onset of Covid-19, as the recession worsened in the first quarter and with worse expected to have come in the second quarter.
Sector-level data showed that the deterioration in business sentiment was broad-based as all sectors of the economy recorded a drop in confidence. Confidence levels in the manufacturing; construction; trade; transport; and tourism fell deeper into pessimistic territory and are all currently below their respective long-term averages, except for tourism. Sentiment in the mining sector, meanwhile, fell from optimism to pessimism in the quarter, but matched its long-term average.
Looking ahead, economic sentiment is likely to have deteriorated further in the second quarter given the expected worsening of the economic slump at the hands of Covid-19 and collapsing oil prices.
Author: Jan Lammersen, Economist