The Office for Economic Studies of Banco de Fomento Angola (BFA) considers that the Angolan economy could grow 2 to 3% this year, noting that the reduction in economic activity – indicated in a report by the country’s National Institute of Statistics – results from an accounting effect.
“Our expectation for 2021 is for sustained growth in non-oil economic activity, gradually beginning to see some effects of economic diversification”, write the analysts, in a note on the latest figures from the National Institute of Statistics, in which they give account of a drop of 3.4% in the first quarter compared to the same period in 2020, and a rise of 0.2% compared to the previous quarter.
“In view of the Government and IMF forecasts, we are cautiously more optimistic”, point out the analysts in the note sent to clients and to which Lusa had access, in which they estimate a GDP growth between 2 and 3% this year.
In the document, the analysts explain that the drop in GDP is caused by the “variation in the volume of crude oil produced, which, for accounting purposes, leads to a fall in economic activity measured, despite the very significant increase in revenues that should occur this year, through higher prices”.
This method, they explain, “implies that, despite a clear increase in oil revenues this year due to the huge price growth (for companies, in fiscal terms, and in the availability of foreign exchange), the accounting for GDP effects will always be negative because the volume, in barrels, of exported crude is falling”.
Still, they warn, the improvement in the growth of the Angolan economy will only reach the population if the effect is prolonged over time.
“However, it must be reaffirmed that sustained growth will only affect poverty and economic difficulties for the population if it remains for quite a few quarters”, they affirm, concluding: “It is an auspicious beginning, but still a beginning”.
According to the Quarterly National Accounts, released this week by the National Institute of Statistics of Angola, the Gross Domestic Product (GDP) fell 3.4%, having registered an improvement of 0.2% compared to the last quarter of last year.
“Gross Domestic Product (GDP) in chained volume for the first quarter of 2021 compared to the first quarter of the previous year, seasonally adjusted, decreased by 3.4% and compared to the previous quarter (fourth quarter of 2020) grew by 0.2%”, reads the document available on the Angolan INE website.
According to the report, “the performance of economic activities in the first quarter of 2021 compared to the first quarter of 2020, in terms of negative variation, is fundamentally attributed to the activities of Construction (-31.5%), Extraction and Refining of Oil (-18.6%); Transport and Storage (-15.6), Financial Intermediation Services (-9.9) and Post and Telecommunications (-5.8%)”.
The Government of Angola expects the country’s economy to come out of the recession it has faced since 2016 this year, registering a slight growth of 0.1%, while the International Monetary Fund anticipates a recovery of 0.4%.