Angola: Economy rebounds with multi-quarter-high growth rate in Q3
GDP returned to growth in the third quarter, expanding 1.4% year on year after flatlining in Q2. Q3’s reading marked the best result since Q4 2022. On a seasonally adjusted quarter-on-quarter basis, economic growth accelerated to a five-year high of 1.9% in Q3 from the previous quarter’s 0.2% expansion.
The annual improvement reflected growth in the non-oil sector roughly doubling to 2.3% year on year in Q3 (Q2: 1.2% yoy). The acceleration was spearheaded by stronger growth in the agricultural and mining sectors. On the flip side, the communication, financial and transportation sectors swung into contractions in Q3. Meanwhile, the oil sector contracted at the slowest pace since Q4 2022 in Q3, falling 0.8% year on year (Q2: -2.9% yoy). Oil output declined in the period on the back of shutdowns stemming from malfunctions in the Mafumeira Sul platforms.
Our panelists expect the economy to have gained further steam at the tail-end of 2023, owing to a robust oil sector. That said, a pickup in average inflation—stemming from a weaker kwanza—and rising concerns over global oil demand pose downside risks to the projection. The consequences of Angola’s exit from OPEC, effective from 1 January 2024, will be key this year.
EIU analysts commented on the implications of Angola’s exit from OPEC:
“Leaving OPEC will allow Angola to ramp up oil production. Angola’s resistance to the OPEC quota cut stems from the need to shore up declining oil production by attracting new investments, without being constrained by OPEC limits.”