Economic Outline

Economic Indicators

Among the largest oil producers in Africa, Angola also boasts the third-largest GDP in sub-Saharan Africa (IMF). The country’s economy rebounded in 2024, growing by 3.8% compared to 1% in 2023, as oil production exceeded expectations, averaging over 1.1 million barrels per day. Economic recovery expanded to the non-oil sector, which grew by 4.8% in the first three quarters. This growth was driven by mining (with record diamond production), fisheries, and services. Despite early drought conditions, the agriculture sector also contributed to non-oil growth. According to the IMF, growth is expected to remain at or above 3.0% in 2025. With stable oil production, overall growth will likely be driven by the non-oil sector, which is gradually strengthening due to a revival in investment and credit growth.

Concerning public finances, despite a 20% increase in oil revenues, underperformance in non-oil revenues, overspending on capital projects, and slower fuel subsidy reforms resulted in a 1% fiscal deficit in 2024, compared to a projected 1.3% GDP surplus. However, public debt decreased to 62.4% of GDP in 2024, down from 71.4% in 2023, due to strong nominal GDP growth and external debt repayments. The overall fiscal deficit is projected to rise to 1.3% of GDP in 2025, up from 1% in 2024, with the non-oil primary balance declining to -7.2% of GDP from -5.7% (IMF). Inflation remained high following a 44% exchange rate depreciation in June 2023 (the national currency fell by over 60% since then) and import substitution measures, which increased food production costs. Annual CPI inflation stayed elevated at 27.5% in December 2024, with food and non-alcoholic beverages contributing over 13 percentage points to the overall rate. In response, the central bank (BNA) raised its monetary policy rate by 150 basis points to 19.5% in 2024 and streamlined interbank liquidity management. Inflation is expected to continue easing as the supply shock fades, with annual CPI inflation projected to fall below 20% in 2025 and gradually align with the BNA's single-digit target over the medium term (IMF).

The authorities recognize that for Angola to achieve higher and sustainable growth, the economy must be diversified and new sources of growth identified beyond the oil sector. However, substantial infrastructure investment is necessary to drive long-term economic growth, create employment, and improve social services. In fact, inequalities and inflation are fueling dissatisfaction among the population. Only a third of the population has access to electricity, and although income per capita has been gradually increasing, especially in metropolitan regions, poverty and unemployment rates remain high. According to the National Statistics Institute (INE), the unemployment rate stood at 30.8% as of Q4/2024.

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