Luanda - The Institute of International Finance (IIF) expects Angola's economy to grow by 3.1 percent this year, in a scenario where Covid-19 will continue to hamper the country's prospects.
A study by the IIF states that Angola's economy contracted 4.3 percent in 2020, and there’s expectation of a modest economic recovery of around 3.1 percent this year, due to the stabilization of oil production and the lifting of containment measures.
According to Agência Lusa news agency, the “Analysis of Emerging Markets in Africa” sent to private creditors, points out that "the containment measures, supported by effective crisis management and a strong policy programme, implemented by the Angolan authorities, helped to mitigate the economic and health consequences of the shock of the pandemic ".
The document, which focuses on several economies on the African continent, recalls that the Angolan currency, the Kwanza, depreciated itself by 58 percent in 2020, which helped to mitigate the impact of falling oil prices on the budgetary and external positions of public accounts of Angola.
Public debt, adds the IIF Study, suffered from the devaluation of the national currency, causing the ratio according to the Gross Domestic Product (GDP) to rise at a rapid pace to 122 percent in 2020.
According to the Study, it should be noted that prolonged low oil prices will prevail in the coming months, so the International Institute of Finance offoresees that the current account will continue show a deficit of around 5 percent, and that the external debt will continue to rise to about 90 percent of the Gross Domestic Product (GDP) in 2022.
According to the document, it is in this context that Angola's adherence to the Debt Service Suspension Initiative (DSSI) and the agreements reached with Chinese creditors are explained, with the IIF estimating that the country will save around 6.7 billion dollars (equivalent to 5.5 billion euros) over the next three years.
"Debt restructuring will also bring gross financing needs down to close to 10 percent of GDP in the medium term, and help Angola reduce the volume of debt to a more manageable level," describe IIF experts, concluding that “at the political level, the country should remain stable, with a popular and reformist president”.
