In accordance with government estimates, Gross Domestic Product (GDP) recorded a negative real change of 1.1% in 2019. The performance compares with the downturn of 1.2% in the previous year, a reflection of the low oil production associated with the moderation of non-oil sector growth.

Consumption is estimated to have remained the main item in the composition of Angola’s GDP in 2019, with an impact on GDP growth, in line with the decrease in households’ purchasing power, the maintenance of price increases, the decrease in employment levels and the maintenance of exchange rate depreciation in the economy. The same performance may have been confirmed in public consumption, which remained stagnant due to the commitment to fiscal consolidation. Public and private investment remained low, with public investment forecast to increase by 42% over the previous year, while foreign direct investment fell again. On the other hand, private investment financed by the banking sector increased by 22% compared to the previous year.

The 2019 Global Competitiveness Index ranked Angola as the 136th most competitive country in the world with 38.1 points. The performance represents an improvement of 1.0 p.p. over the previous classification, in an assessment of 141 countries.

Price levels

The National Consumer Price Index (CPI) increased by 16.9% to 271.22 points. The level recorded represents the lowest of the last three years and remained below the level provided by the Government, of 17.7%, reflecting the restrictive conditions of liquidity in the market, better allocation of currencies in the foreign exchange market and reduction of the disposable income of families.

Exchange market and external sector

During 2019, the process of foreign exchange market liberalisation continued, which contributed to the improvement in access to foreign currency and was reflected in the narrowing of the exchange rate differential between the formal and parallel markets. It should be noted that the exchange rate differential against the dollar went from 150% in 2017 (when the new foreign exchange regime was implemented) to around 23% in December 2019, down from 28.26% in 2018.

It should be noted that, since 2 January 2020, BNA has adopted a measure which may contribute to the efficiency of the foreign exchange market by allowing Commercial Banks to acquire foreign currency directly from the oil companies.