Angola: Growth records the best result since Q1 2015 in Q2
September 30, 2022
GDP growth accelerated to 3.6% year on year in the second quarter, from 2.8% in the first and marked the fastest expansion since Q1 2015.
The acceleration in growth was spearheaded by a strong extractive sector: Elevated oil prices due to the fallout of the war in Ukraine, coupled with higher oil output, boosted the oil sector, while mining output rose by 40.3% during the period amid more favorable climate conditions. Additionally, the agriculture, construction and transportation sectors also contributed significantly to the uptick. That said, activity in wholesale and retail trade and financial services contracted.
On a seasonally-adjusted quarter-on-quarter basis, economic growth moderated to 0.5% in Q2, from the previous quarter's 1.2% expansion, which suggests that underlying conditions eased in the period.
Looking ahead, the economy is seen expanding at a similar pace in H2. A milder pandemic situation, together with lower interest rates, is supporting domestic demand, while a stronger kwanza due to soaring oil exports is cooling inflation. That said, Cabinda oil prices trended down in Q3, which likely constrained the external sector. However, in Q4 and into 2023, the oil sector will strengthen as OPEC+ cuts come into effect in November. The global economic slowdown and regional instability pose risks to the outlook.
Author: Adrià Solanes, Junior Economist