Angola: Inflation eases but remains elevated by regional standards in April
Latest reading: Inflation fell to 22.3% in April from March’s 23.9%, marking an over one-year low. Resumed Central Bank intervention in FX markets has supported the kwanza, tempering imported inflation. Domestically, elevated interest rates and improved consumer goods supply have contributed to a continued decline in inflation. That said, the paring back of fuel subsidies likely stemmed the overall decline in inflation and will likely keep it elevated ahead.
Meanwhile, the trend was eased, with annual average inflation edging down to 27.8% in April from March’s 28.3%.
Lastly, consumer prices rose 1.34% over the previous month in April, which was below the 1.38% increase logged in March and marked the lowest result since May 2023.
Panelist insight: EIU analysts commented:
“We expect an increase in diesel prices of 50% in late March to create significant cost-push pressures that will reverse the inflation slowdown. The rise in diesel prices is part of broader fuel subsidy reform that the authorities have been implementing since June 2023 in order to increase fiscal sustainability. Despite fuel and other utilities constituting an estimated 5% of Angola’s consumer price index basket, the secondary effects of fuel price rises on inflation are sweeping. Diesel is a critical fuel for transportation and power generation and is used widely in back-up generators.”