Angola: Inflation continues to dip, but remains too high for comfort
July 14, 2017
Consumer prices in the province of Luanda rose 1.58% in June from the previous month, down from May’s 1.76%. According to the National Statistical Institute (Instituto Nacional de Estatística), June’s figure reflected a broad-based increase in prices, with particularly significant upticks in prices for health, clothing and footwear and household equipment.
Inflation dropped from 34.1% in May to 31.9% in June, the lowest rate in 12 months and marking the sixth consecutive monthly decline. Recent data suggests inflationary pressures are gradually unwinding, after trending upwards uninterruptedly from 2015 until the end of last year, as the effects of higher fuel prices and the depreciation of the kwanza finally start to lessen. In addition, the National Bank of Angola’s (BNA) significant tightening cycle engaged in 2016 seems to be bearing fruit. Inflationary pressures nevertheless remain elevated, denting consumers’ purchasing power and whipping up economic uncertainty, and matters aren’t being helped by the parallel exchange rate, which is significantly depreciated compared to the fixed rate set by the Central Bank.
Author: Oliver Reynolds, Economist