Angola’s total public is expected to fall to 69.4% of GDP in 2024, compared with a forecast of 110.9% of GDP in 2019, according to a table included in a detailed report by the International Monetary Fund (IMF) recently published in Washington.
This same table shows that Angola is expected to end the year with domestic public debt of 34.4% of GDP and external debt of 76.5% of GDP, most of which are medium and long term debt. These percentages are expected to fall to 12.9% and 56.5%, respectively, in 2024.
“Angola‘s debt remains sustainable, but the ratio of public debt to gross domestic product has increased substantially, and the already high risk have increased even more,” said the experts from the International Monetary Fund (IMF) in the detailed report on the second review of the macro–economic stabilisation programme underway, which has a financial support of US$3.7 billion.
The document noted that in 2019 Angola should end the year with a total public debt ratio of 110.0%, “reflecting mainly the rapid depreciation of the national currency in the last quarter,” with the IMF noting that, “as global oil prices should remain low, the indicators of the debt burden will continue to be high.”
“Angola‘s debt remains highly vulnerable to macro–economic and budget shocks, with the main risks to the sustainability of the debt coming from a faster–than–expected depreciation of the exchange rate, more declines in prices or in oil production, a possible deterioration in access to financial markets and the emergence of various risks, including State–backed debt.
In the analysis of the programme, dated December, but which is the result of meetings between the IMF and the Angolan authorities, in Luanda, in November, the IMF said that “there are multiple ongoing efforts to deal with the risks of debt sustainability.”
The Fund‘s base scenario points to a decline in the debt to 69.4% of GDP in 2024, five percentage points above the medium–term target, which is bolstered by oil revenues (two thirds of the total), “which helps to limit the dynamics of the debt to exchange rate fluctuations.”
In addition, the report said, this expected reduction of the public debt ratio is supported, “by continuous budgetary effort and by greater economic growth, bolstered by structural reforms and a more competitive exchange rate.”