2.0
Macroeconomic Framework
2018 was characterized by the upkeep of the challenges of resuming economic growth, in Angola. As a result of the ongoing structural strategies and reforms, particularly in fiscal, exchange and non-oil private sector fostering policies, the Angolan Government prospects that GDP growth will recover in the coming years to levels above 2%.
2018 was characterized by the upkeep of the economic recession at levels above 2017. In accordance with the International Monetary Fund, Angola recorded a negative economic performance for the third year in a row, much due to a negative growth rate of the Gross Domestic Product (GDP) in 2018, of -1.7%.
The promotion of the non-oil sector has been one of the main goals since the downfall of international oil prices. The Government estimates that the sector recorded a growth of 1.0% in 2018. The performance of the non-oil sector reflects the recovery of economic activity in the energy sectors, with a growth of 30%.
GDP Growth Rate (%)
Oil and Non-Oil GDP (%)
Price level
The national inflation rate recorded a downward trajectory in the course of 2018, taking into account the decrease of 4.12 pp to 18.6% in the analysis from January to December.
Inflation is significantly lower than the 28.7% estimate presented in OGE 2018, remaining below the 2017 and 2016 records, of 23.67% and 41.1%, respectively.
Annual Inflation Rate (%)
Monetary policy
The last year was marked by moderate restrictive monetary policy measures adopted by the Angola Central Bank (BNA – Banco Nacional de Angola) in previous years.
BNA cut the Marginal Lending Rate twice in 2018 at the meetings of the Monetary Policy Committee in May and July, reducing it from 20.0% to 18.0% and from 18.0% to 16.5%, respectively. On the other hand, the Marginal Lending Facility Rate remained unchanged at 0%.
Reference Interest Rates (%)
Banking sector
Commercial banks’ assets increased by 30% in 2018, compared to the 2% recorded in 2017. A significant part of this growth was supported by the exchange rate effect created by the depreciation of kwanza throughout the year, since banks still account for more than 30% of total assets in foreign currency.
Banking sector structure
External Sector
The goods account which, coming on top of services and income, comprise the current account, showed the highest positive variation by recording a year-on-year increase of 48.8%, to USD 6,788.1 million in the last but one quarter of 2018. It should be noted that the GDP ranged from 14.6% to 24.5% in the period under review.
Financial markets
Regarding Angola, Eurobonds (sovereign bonds denominated in foreign currency) were issued at the beginning of May, in the amount of approximately USD 1.75 billion with a 10-year maturity at an 8.25% interest rate and USD 1.25 billion with a 30-year maturity at a 9.375% rate.
Exchange market
The adoption of a flexible exchange rate system with a bandwidth in 2018 over the previous exchange rate system and the progressive replacement of the mechanism of direct allocation of foreign currency by currency auctions helped to decrease the pressure on the stock of foreign currency as well as to improve the efficiency in the distribution of currencies.
Commodities market
At the end of 2018, OPEC and Russia reached a new crude oil cut-off agreement, expected to be in force in 2019, which will reduce OPEC production from 26.74 to 25.94 million barrels per day and non-OPEC (Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan) from 18.32 to 17.94 million barrels per day. Under the new agreement, Angola has a production limit of 1.48 million barrels per day.