Financial rating agency Fitch Ratings predicts growth of 0.9 per cent in Angola this year, accelerating to 1.5 per cent in 2025, with inflation slowing from 24.5 per cent to 16.6 per cent.
According to the more detailed explanation of the maintenance of Angola’s rating at B- on 15 December last year, released this week, Fitch Ratings presents specific forecasts for each year, predicting that the Gross Domestic Product (GDP) of this Portuguese-speaking country will go from growth of 0.2% in 2023, to 0.9% and 1.5% this year and next.
“Our GDP growth forecast assumes a decline in oil production, to an average of 1.09 million barrels per day in 2023 and 1.05 million in 2024 and 2025, which is slightly below the government’s forecast in the General State Budget for 2024, which assumes production of 1.05 million barrels in 2024 and well below the Ministry of Hydrocarbons’ forecast of 1.18 million barrels per day between 2022 and 2025, which reflects production at maximum capacity,” the analysts write.
Angola’s rating “balances weak governance indicators, high inflation, high levels of debt in foreign currency and one of the highest levels of dependence on raw materials among the countries assessed by Fitch, with higher international reserves than peers, current account surpluses and manageable payment risks due to a still favourable oil price over the next two years,” write the Fitch analysts in the detailed note, consulted today by Lusa.
Among the main positive points of the Angolan economy, this financial rating agency owned by the same owners as BMI Research highlights the high levels of international reserves and a globally balanced budget, which reduces financing pressures.
On the other hand, the main weaknesses are “a high dependence on raw materials, well above other African oil exporters, high debt servicing costs, a large percentage of public debt, representing around 70 per cent of the total debt volume, weak human development and governance indicators, and high inflation in relation to peers”.
With regard to public debt, Fitch foresees a slight increase in the debt to GDP ratio, which should rise from 57.3 per cent last year to 60.6 per cent this year and 64.2 per cent in 2025.
Lusa
