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International Monetary Fund. African Dept.
While improving, the economic outlook remains highly challenging, given the slow and uncertain recovery from the COVID-related shocks. Heavily dependent on oil, the Angolan economy has suffered from weakness in that sector, with falling production (related to the pandemic) and only a partial rebound in international prices recently. These shocks have led to a fifth straight year of recession and hardship. The public debt-to-GDP ratio has risen to very elevated levels, driven by recent real exchange rate depreciation. Nevertheless, strong fiscal performance and active debt management are setting the stage for a gradual economic recovery and reduction in debt vulnerabilities.
International Monetary Fund. African Dept.
While improving, the economic outlook remains highly challenging, given the slow and uncertain recovery from the COVID-related shocks. Heavily dependent on oil, the Angolan economy has suffered from weakness in that sector, with falling production (related to the pandemic) and only a partial rebound in international prices recently. These shocks have led to a fifth straight year of recession and hardship. The public debt-to-GDP ratio has risen to very elevated levels, driven by recent real exchange rate depreciation. Nevertheless, strong fiscal performance and active debt management are setting the stage for a gradual economic recovery and reduction in debt vulnerabilities.
International Monetary Fund. African Dept.
The economic outlook has substantially deteriorated since the Second Review, driven by the negative effects of the COVID-19 pandemic on global economic activity and oil prices. The adverse impact of the shock on the Angolan economy, which is highly dependent on oil (95 percent of exports, two-thirds of government revenue), adds to the hardship from five consecutive years of recession. Rapid exchange rate depreciation and the decline in oil prices have pushed the public debt-to-GDP ratio to a very high level. However, continued fiscal retrenchment, prudent debt management, and debt reprofiling are expected to improve debt dynamics progressively.
International Monetary Fund. African Dept.

International Monetary Fund Washington, D.C . © 2021 International Monetary Fund Front Matter Page ANGOLA FOURTH REVIEW UNDER THE EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY AND REQUESTS FOR MODIFICATIONS OF PERFORMANCE CRITERIA AND WAIVERS FOR PERFORMANCE CRITERIA APPLICABILITY AND NONOBSERVANCE December 23, 2020 EXECUTIVE SUMMARY Context . While improving, the economic outlook remains highly challenging, given the slow and uncertain recovery from the COVID-related shocks. Heavily dependent on oil, the Angolan economy has suffered

International Monetary Fund. African Dept.

mitigate the impact of COVID-19 and sustain structural reform implementation. The impact of the COVID-19 pandemic on the Angolan economy has begun to abate amid higher oil prices and less disruptive containment measures. Non-oil growth has started to recover and is expected to contribute to a broad stabilization of overall output in 2021. Inflation has reached over 25 percent, driven by supply-side factors. Continued fiscal restraint should deliver a substantial overall surplus in 2021, while higher oil prices are supporting a high current account surplus. Angola

International Monetary Fund. African Dept.

The Angolan economy has suffered from a series of strong shocks, beginning with the oil price shock in 2014 and continuing with the current shocks related to COVID-19. The 2014 shock more than halved crude oil prices, leading to a sharp drop in oil receipts. The authorities recognized then that large primary surpluses would be needed to help stabilize high debt levels after the oil shock, and following IMF advice, undertook significant fiscal consolidation, resulting in an 18 percent of GDP improvement in the non-oil primary fiscal balance over 2015–16, mainly

International Monetary Fund. African Dept.

, together with conservative fiscal budgeting and execution. Given the very high risks to Angola’s debt sustainability, they remain ready to act to mitigate the impact of possible shocks to the Angolan economy and their possible negative effect on the dynamics of the public debt. C. Recalibrating Monetary Policy 11. Monetary policy is gradually shifting from accommodating the COVID-19 shocks earlier in 2020 to reining in inflation . Monetary accommodation in the first half of 2020 worked well to ease liquidity pressures on non-financial corporations, banks, and the

International Monetary Fund
This paper provides an analysis of important factors that have affected the Angolan economy in recent years. The paper summarizes political developments since 1992 and provides an overview of developments in each major sector of the economy. The paper surveys the trade regime and reform priorities affecting it, summarizes available information on poverty, and describes issues affecting development of the diamond sector, formerly a mainstay of the Angolan economy. The paper also provides a technical analysis of the authorities’ current monetary rule, and a summary of the tax system.