Angola: Economy loses steam in the second quarter
GDP growth slows to a one-a-half year low: Annual GDP growth moderated to 1.1% in the second quarter from 3.5% in the first quarter, marking the slowest expansion since Q4 2023. On a seasonally adjusted quarter-on-quarter basis, GDP flatlined in Q2 after 2.3% growth in Q1.
Oil sector drags the economy down in Q2: The slowdown in annual GDP growth was driven by the hydrocarbons sector, which shrank 8.7% year on year—nearly twice Q1’s 4.4% drop and the steepest decline since Q3 2021—subtracting 1.9 percentage points from GDP growth. Crude extraction fell at a sharper rate than in Q1, as the country struggled with deteriorating infrastructure, maturing oil fields and production stoppages.
Adding to the headwinds, the non-oil sector cooled to a 3.6% expansion in Q2 (Q1: +5.7% yoy), as the mining and quarrying sector recorded its weakest growth since Q1 2024 due to a high base effect. Moreover, the agricultural and services sectors lost momentum, while construction activity shrank. Still, the county’s strong diversification efforts yielded results in the manufacturing sector, which registered record growth, owing mainly to food processing.
Economy to move into steadier waters: Our Consensus is for GDP growth to accelerate in Q3, as oil production should pick up after the earlier-than-expected launch in late-July of two offshore rigs with a joint output capacity of 60,000 barrels per day.