South Africa-based consultancy firm NKC African Economics recently stated it expects Angola to have recorded a recession of 5.5% last year but that it should see a 2.2% growth in 2021 despite the danger of the pandemic and lower oil production.
“Due to the number of new oil projects that replace the maturing wells and the obligation to adhere to production cuts, we expect oil production to drop slightly from 1.27 million barrels per day in 2020 to 1.26 million barrels this year”, the firm wrote while commenting on GDP figures for the third quarter.
“Our forecast points to a 5.5% contraction in 2020, the worst since 1993, followed by a below-potential recovery of 2.2% this year”, the report read, while adding that “oil exports, which dictate the direction of economic growth, were much lower in 2020 in a context of slowing production and falling oil prices”.
Although the price improved as early as May, after the April drop to its lowest level in 21 years, “the recovery remains uncertain due to fears of a second wave of covid-19 infections.”
The Angolan economy recorded the first improvement in GDP since the beginning of the pandemic, with a 2.7% increase in the third quarter, but it remains at a loss of 5.8% when compared to the same period, according to Angola National Statistics Institute (INE).
“The Gross Domestic Product (GDP) in volume for the third quarter of 2020 compared to the third quarter of the previous year, seasonally adjusted, fell by 5.8%, and compared to the previous quarter, it grew by 2,7%”, reads the note released by INE on January 18th.
Despite the improvement compared to the previous quarter, the Angolan economy continues to contract, as it registered a negative variation compared to the growth of the same quarter of 2019, and is going to contract by 5% in 2020 if the average remains in October to December, whose data are not yet available.
Looking at the average for the first three quarters of 2020, it can be seen that the Angolan economy fell 0.9% in the first three months of last year, and then worsened the fall to 8.3% and 5.8% in the two quarters which keeps the country in negative territory.