Angola: Inflation continues to drop in July
August 14, 2017
Consumer prices in the province of Luanda rose 1.77% in July from the previous month, up slightly from June’s 1.58%. According to the National Statistical Institute (Instituto Nacional de Estatística), July’s figure reflected a broad-based increase in prices, with particularly significant upticks in prices for household equipment, clothing and footwear and alcoholic beverages and tobacco.
Inflation dropped from 31.9% in June to 29.0% in July, the lowest rate in over a year and marking the seventh 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