Economic growth in Angola is likely slow to 3.9% in 2014 from an estimated 6.8% last year, with strong agricultural production offsetting a drop in oil output, the International Monetary Fund (IMF) said. The fiscal balance in sub-Saharan Africa’s second-largest oil producer, which has been in surplus in the last four years, will also deteriorate to a deficit of 4% of gross domestic product (GDP), the IMF said after consultations with Angolan authorities. “Notwithstanding strong economic growth over the past decade, poverty and income inequality remain a challenge,” it said. “In the long run, reducing the dependence on oil is key to containing external vulnerabilities and achieving sustainable and inclusive growth.”
Angola’s economy has grown rapidly since a 27-year civil war ended in 2002, but the country still needs to repair infrastructure and expand other sectors. Oil output represents 40% of gross domestic product and over 95% of export revenue. Ongoing investments in agriculture would lead to an increase of about 11.5% in agriculture production in 2014, the International Monetary Fund said.
Inflation, which edged up slightly to 6.98% year-on-year in July, would reach 7.5% by the end of the year, it added.