IMF expects Angola economy to grow 4.5 pct in 2015

APRIL 15TH, 2015    NEWS

Angola’s Gross Domestic Product (GDP) is expected to grow this year at a rate of 4.5 percent and slow to 3.9 percent in 2016, after posting growth in 2014 of 4.2 percent, according to the forecasts included in the International Monetary Fund’s (IMF) World Economic Outlook, published Tuesday in Washington.

The IMF report presents a set of indicators and forecasts for Angola, namely that the inflation rate is expected to increase this year and next, from 7.3 percent in 2014 to 8.4 percent this year and 8.5 percent next year.

The fall in oil prices since last summer has made the over-reliance of the Angolan economy on oil very apparent, as oil accounts for over 95 percent of the country’s exports and 70 percent of tax revenue in 2014, a percentage that this year will be reduced to 36.5 percent.

The hole in Angolan public accounts due to the sharp drop in oil revenues, is now estimated at 806.5 billion kwanzas (US$7.35 billion), forcing new borrowing when along with ongoing negotiations by government with the World Bank to obtain a loan of US$500 million.

Angola has secured loans of 500 million euros from Spanish Banco Bilbao Vizcaya Argentaria and US$250 million from US bank Goldman Sachs and another US$250 million from UK fund Gemcorp Capital.

In addition in August Angola took on a loan US$1.5 billion from Russia’s VTB Capital PLC bank.

So far this month Angola has taken on a loan of US$123.7 million from the African Development Bank (AfDB) to finance a water supply and sanitation project and the South African bank Rand Merchant Bank (RMB) will finance the reconstruction of two Angolan national roads with a total of US$216 million. (macauhub/AO)