Angola: Economy contracts again in Q2
October 15, 2019
The economy contracted 0.1% on an annual basis in the second quarter, following the previous quarter’s revised 0.3% dip (previously reported: -0.4% year-on-year), according to national accounts data released by Angola’s Statistical Institute (INE) on 15 October.
The all-important Angolan oil sector, which accounts for around one-third of GDP, once again drove the overall contraction amid sliding domestic oil production. That said, the decline in oil sector activity moderated further in Q2 and was the softest since Q4 2017, seemingly thanks to higher global crude prices. Meanwhile, output shrank in the commercial sector at the strongest pace in a year, while construction activity growth plummeted. On a more positive note, momentum in the agricultural sector improved somewhat in Q2.
Looking ahead, prospects remain bleak for the remainder of this year, amid downbeat oil production and volatile global crude prices. Growth should rebound next year, however, against the backdrop of ongoing economic reforms and support from the IMF. That said, external headwinds and weak domestic oil production are set to limit the recovery.
Author: Almanas Stanapedis, Economist