Consultancy firm Fitch Solutions estimates that Angola’s fiscal balance this year will go from deficit to surplus, mainly due to oil revenues, while seeing public debt below 100% of GDP in 2022.
“We now expect Angola’s budget balance to change from an estimated deficit of 1.4% of GDP in 2020 to a surplus of 0.7% in 2021, at the expense of an increase in oil revenues”, reads the analysis of the evolution of Angola’s public accounts.
In the document, Fitch’s analysts recall that “this is an upward revision compared to the previous forecast of a deficit of 0.4% in 2021, and reflects the view that higher tax revenues will offset an eventual rise in public spending.”
In this new scenario, Fitch Solutions foresees the surplus widening to 1.4% of GDP next year, driven by oil revenues, and also anticipates an improvement in public debt, which is expected to decline from 122% of GDP in 2020 to 106.8% this year and 97.8% in 2022.
“Angola’s debt burden will gradually fall with the economic recovery and fiscal consolidation, which in turn will help to limit financing needs,” analysts point out, concluding, however, that “the debt-to-GDP ratio will remain well above of an average of 57.4% recorded between 2010 and 2019”, not only due to the devaluation of the kwanza, but also due to the country’s continued indebtedness.
