Angola’s central bank forecasts an inflation rate of 17.5% this year. It expects improvements in the supply of goods and services and the adaptation of monetary conditions to economic activity.
The forecast was made today by the governor of the National Bank of Angola (BNA), Tiago Dias, at the end of the 121st meeting of the Angolan Central Bank’s Monetary Policy Committee (CPM), held between Monday and today.
Tiago Dias said that the monthly inflation rate in December last year was 1.70%, compared to 1.61% in November, with year-on-year inflation standing at 27.5%.
“The prices of goods and services in the economy remain high. However, there has been a slowdown in monthly inflation, which began in May 2024, as well as in year-on-year inflation since August, after peaks of 2.61% and 31.09% in April and July, respectively,” said the BNA governor.
According to Tiago Dias, the change in inflation in 2024 was due to various factors, with direct and indirect impacts, such as adjustments to the prices of public transport, diesel, private and public school fees, the telecommunications service and the reduction in the supply of agricultural goods due to the intensity of the rains.
“Our outlook is that year-on-year inflation will continue to fall until June 2025. From June 2025 onwards, the situation will become much more challenging, but the data in our possession clearly shows that year-on-year inflation will continue to fall,” he emphasised.
Regarding the impact of the 25% civil service salary increase, scheduled for March this year, on the inflation rate, Tiago Dias said that the National Bank of Angola has sufficient monetary policy instruments to deal with any inflationary pressures that may arise from the salary increase.
“For the time being, this is not a concern for the National Bank of Angola,” he said.
Tiago Dias pointed to changes in administered (defined) prices as risks for an increase in the inflation rate, namely a possible adjustment in fuel prices or production below economic growth forecasts, particularly oil production.
“If it falls short of our forecasts, this could impact the availability of foreign currency in the economy and, consequently, inflation. We could also mention that he pointed out that a substantial reduction in oil prices on the international market, below the reference price of the General State Budget, could also impact inflation.
Lusa
