The Angolan economy is expected to record a modest recovery in 2020, which will result in a growth of less than 1.0%, according to the latest briefing from the Office of Economic Studies of Banco de Fomento Angola.
“There will be a slight fall (or even stagnation) of the oil economy, with new investments making up almost entirely for production drops in the more mature blocks and, for the non-oil economy an increase below 1%, is expected which is subject to the stabilisation and predictability of the exchange rate, allowing economic agents to regain some confidence,” the document said.
Oil production will continue to fall in more mature blocks and, even with investments in blocks 15.06 and 32, will be by almost 0.01 million barrels per day, which should lead to a fall in oil GDP of around 0.5%.
Non-oil economy growth is expected to be contained, despite being conditional on exchange rate stability, allowing economic agents to recover their confidence – the transition to the new exchange rate system has had a significant effect on the confidence of entrepreneurs and consumers, with the diamond and mining sector being an exception to this scenario as it has been boosted by the beginning (although a half steam) of the Luaxe diamond operation.
The briefing issued on Thursday said that Angola’s economy continued to fall in 2019, having recorded a contraction of 0.4% in the first nine months of the year, with the oil sector dragged by the fall in production in the more mature blocks, and a drop of 6.6% between January and September.
On the non-oil side, the figures seem to point to a slight recovery, but the methodology used by the National Statistics Institute calculate Gross Domestic Product, “does not allow us to ascertain this fact with certainty,” according to the document, which points to a recession of around 1% for the whole of 2019.