Angola Inflation May 2024

Angola: Inflation approaches seven-year high in May

Inflation rose to 30.2% in May from April’s 28.2%. May’s reading represented the highest inflation rate since June 2017. Price pressures have been fueled by surging food prices, a weakening kwanza and last year’s petrol subsidy removal.

As a result, the trend pointed up, with annual average inflation rising to 19.9% in May (April: 18.3%), its highest value since January 2023.

Finally, consumer prices increased 2.49% over the previous month in May, slowing slightly from April’s 2.61% increase.

Our panelists expect price pressures to moderate somewhat from current levels by end-2024 as the effects of ongoing monetary policy tightening filter through the economy. That said, full-year inflation is forecast to nearly double from 2023 this year on a weaker currency year on year, faster economic growth and the government’s commitment to phase out remaining fuel subsidies.

Gerrit van Rooyen, analyst at Oxford Economics, commented:

“In our view, inflation will continue to creep higher […] due to the passthrough of the weaker exchange rate on imported consumer goods. As a result, we forecast the average inflation rate will rise from 13.6% in 2023 to 24.5% in 2024, before receding to 13.5% in 2025 thanks to tight monetary policy and more exchange rate stability.”

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