Fáusio Mussá, Standard Bank’s chief economist for Angola, Mozambique, and the Democratic Republic of the Congo (DRC), emphasized on Tuesday (30) in Luanda that Angola’s fiscal policy is “very prudent, but in a pre-election year, the country needs to exercise greater caution to avoid a fiscal slippage.”
He was speaking to the press at the conclusion of the first edition of Standard Bank Angola’s 2026 Economic Briefing, titled “Angola: Macroeconomic Stabilization in an Environment of High Oil Price Volatility,” where he served as the keynote speaker.
According to Fáusio Mussá, the world is experiencing some turmoil due to the conflict in the Middle East, but there are expectations of peace in that region and a normalization of oil prices, which have negatively impacted some value chains, such as those for fertilizers and other industrial products.
Angola needs to continue implementing reforms to attract local and foreign investment and improve the business environment, Mussá cautioned, noting that the results achieved so far are encouraging, with data pointing to consistent growth supported by the non-oil sector, thanks to investments in the energy and agriculture sectors and import substitution in various projects.
The macroeconomic analyst emphasized that Angola has benefited from rising oil prices, which have created a more favorable economic environment; however, the challenge posed by fuel subsidies reduces the gains that this economic situation generates for the country.
“There has been a notably prudent fiscal policy and, above all, strong coordination between fiscal and monetary policy to ensure some macroeconomic stability,” said Standard Bank’s chief economist for Angola, Mozambique, and the DRC, further emphasizing the Angolan government’s prudence in making “no adjustments to the State Budget assumptions,” because “uncertainty and volatility are very high.”
Angola will hold its sixth general election in 2027, and Fáusio Mussá stressed that in pre-election years, the risks of a fiscal slippage increase, requiring greater attention to controlling government spending.
“Because as we approach the elections, there may be an intention to complete various projects that have been under development over the years but which, for some reason, have not been completed due to the pace of progress,” he explained.
According to the analyst, from a public finance perspective, Angola must be able to continue “building up some financial buffers, some savings,” which will allow it to manage the impacts of oil price volatility; therefore “care must be taken to ensure that spending is focused on priority projects and that the impact of that spending on public debt and the fiscal balance is mitigated so that there are no spikes in fiscal pressure.”
Regarding inflation, Fáusio Mussá noted that the forecast for Angola through the end of the year is 8.6%, emphasizing that two factors influence inflation trends in the Portuguese-speaking country, one of which is exchange rate stability since 2024, which has allowed economic agents to better manage their import margins, resulting in “a more contained price increase.”
“The second factor is that the government has been maintaining a fuel subsidy. While in Mozambique we saw a 45% increase in the price of diesel—which has an impact on inflation—the increase in Angola was only 5%. This suggests that Angola could achieve single-digit inflation, which would be a first for the country,” he noted.
Standard Bank Group operates in 38 countries, 18 of which are in Africa, and is the largest private bank operating in Africa.
Source: Lusa
