Angola Economic Outlook
After easing in Q4 2022, growth likely remained downbeat in Q1. Oil production declined during the quarter due to maintenance work on the offshore oil field Dalia in February and March. Additionally, oil prices averaged lower in Q1 relative to Q4. These developments bode poorly for the external sector and government finances. More positively, the non-oil sector likely strengthened, buttressed by lower inflation during the period. Shifting to the current quarter, a normalization of oil output in April after maintenance was completed bodes well for activity. In other news, on 4 May, the country signed financing agreements with the EU worth USD 133 million. The funding is part of a Multi-annual Indicative Programme for 2021–2027 and aims to enhance the agricultural sector, formalize the economy and strengthen public finances.
Inflation inched down to 10.6% in April from March’s 10.8%. The reading marked the 15th consecutive decline in inflation. A strong harvest and fuel and food subsidies underpinned the downtrend. This year, inflation is seen around current levels. Key factors to watch are the strength of the kwanza and the trajectory of monetary policy.