Angola: Recession deepens in Q2 amid Covid-19 fallout
October 28, 2020
The economic recession deepened markedly in the second quarter due to the fallout from the global pandemic, with the economy contracting a steep 8.8% year-on-year. The print was notably down from the first quarter’s 0.5% drop and marked the strongest fall in a year.
Sector-level data showed that the downturn was broad-based, although the biggest drops in activity were registered in the transportation, construction, mining and fishing sectors. Restrictive measures to curb the spread of the Covid-19 virus severely hampered economic activity. Meanwhile, the oil sector—which accounts for roughly one third of GDP—shrank for the 17th consecutive quarter, with the pace of the fall intensifying compared to the prior quarter (Q2: -8.2% year-on-year; Q1: -1.7% yoy). Lockdowns enacted abroad likely weighed heavily on the sector as the measures dragged on demand for oil.
Moving forward, the economy likely contracted again in the third quarter and it is set to continue its trend through year-end. Next year, the economy is forecast to recover marginally from years of recession amid rebounding international trade levels and strengthening aggregate demand.
Author: Jan Lammersen, Economist