London – For 2019 Fitch sees the economy expanding by 2.3%, rather than the 2.6% it had previously forecast, it said in a note to investors that Lusa has seen. For 2020, however, it sees growth accelerating to 2.6%, against the 2.2% previously predicted.
Fitch analysts noted that although Angola is set to emerge from recession in the next few quarters, the recovery is likely to be weaker than previously anticipated because of a downtown trend in oil production.
Angola’s government in August revised down its own growth forecast for this year to 2.2%, from 4.9% previously, while the International Monetary Fund foresees 2.3%.
Private consumption and public investment, the Fitch analysts argue, should keep the economy growing in the short term, with the potential for improvement thanks to international financial assistance – a reference to an IMF programme whose precise terms the country is set to finalise in October, and which should bring in some $1.5 billion (€1.27 bilion). However, they warn, in the long term Angola’s high exposure to oil sector volatility presents risks for the growth outlook.
The downgrading of Fitch’s forecast follows the disclosure by Angola’s National Statistical Institute that GDP shrank 2.2% in the first quarter, following negative growth of 2.6% in 2016 and 2.5% in 2017.
Angola’s oil production is also expected to fall in the coming years, as existing wells mature and decline “faster than anticipated”, the analysts argue, citing a drop in production this year in the order of 1.9% from last year’s level.
