20230305-IMF-Angola_2022_Article_IV_Consultation-Press_Release_Staff_Report_and_Statement_by_the_Executive_Director_for_Angola_87页_2mb

Angola continues to experience economic recovery, driven by higher oil prices and improved oil production, with a projected GDP growth of 3.5% in 2023. Inflation has declined significantly to 13.8% year-on-year, supported by lower global food prices and a stronger kwanza exchange rate. The non-oil sector has shown resilience, contributing to overall growth, while challenges remain due to high oil dependence and external vulnerabilities.

Fiscal policy is focused on reducing the non-oil primary fiscal deficit and achieving medium-term debt sustainability targets. The 2023 budget includes modest fiscal adjustments, and efforts are ongoing to mobilize non-oil revenues and phase out fuel subsidies.

Monetary policy is transitioning toward an inflation-targeting framework, with the central bank maintaining a wait-and-see approach while reducing its tightening bias due to declining inflation. The flexible exchange rate has acted as a shock absorber, but vulnerabilities persist due to high oil dependence.

Financial stability remains a priority, with progress in implementing the new Financial Institutions Law and addressing non-performing loans (NPLs). The two under-restructuring banks continue to face challenges, but regulatory measures are being enforced to ensure stability.

Structural reforms are crucial for diversifying the economy, reducing reliance on oil, and fostering inclusive growth. Key areas include tax reforms, public financial management, and privatization. Climate change adaptation and anti-corruption efforts are also being prioritized to address long-term risks and governance issues.

Debt sustainability is supported by recent fiscal improvements, but risks remain, including potential oil price declines and fiscal slippage. The debt-to-GDP ratio is projected to decline, but vigilance is required to maintain fiscal discipline and avoid vulnerabilities.

External stability is bolstered by strong reserves and a surplus in the current account, but geopolitical tensions and global economic uncertainties pose challenges. The central bank is working to eliminate exchange restrictions and enhance monetary policy effectiveness.

These reforms and policies aim to preserve macroeconomic stability while supporting long-term growth.