Angola: Economy records quickest upturn since Q1 2015 in Q3
GDP growth accelerated to 3.9% year on year in the third quarter from 3.6% in the second quarter. Q3’s reading marked the best result since Q1 2015. Accelerations in both the oil and the non-oil sectors drove the uptick.
The crucial oil sector posted the third consecutive quarter of expansion, with growth accelerating to 2.7% from Q2’s 2.2%. The fallout from the war in Ukraine put further upward pressure on the Angolan crude sector as countries diversified their energy sources away from Russia. That said, oil production was still well below pre-pandemic levels.
Meanwhile, activity in the non-oil sector strengthened. Output in agriculture, forestry and fishing grew at a faster clip. Moreover, activity in wholesale and retail trade, as well as in financial services, rebounded strongly. On the flip side, manufacturing and construction output growth decelerated.
On a seasonally-adjusted quarter-on-quarter basis, economic growth ticked up to 0.8% in Q3, from the previous quarter’s 0.5% growth, suggesting that underlying momentum strengthened.
Shifting to the last quarter of the year, the economy is seen slowing slightly. Lower oil production in the period should have taken a toll on the external sector. That said, inflation continued its downtrend despite a 18.3% depreciation of the kwanza throughout Q4, which made imported goods more costly. Lower inflation and interest rates ought to have buoyed domestic activity.
Analysts at the EIU commented on Angola’s prospects for 2023:
“Angola’s economic outlook is broadly positive, despite an expected global economic slowdown in 2023 […]. Falling oil prices will curb Angola’s GDP growth in the first half of 2023 but should not halt investment in oil assets, given OPEC+ activism on supply. The second half will be characterised by a pallid recovery from the global slowdown.”