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Country Forecast Angola February 2013 Updater

  • Publication Date:February 2013
  • Publisher:EIU
  • Product Type: Report
  • Pages:17

Country Forecast Angola February 2013 Updater

Overview

The president, José Eduardo dos Santos, and his ruling party, Movimento Popular de Libertação de Angola (MPLA), have fully consolidated their hegemony over the Angolan political system. Although there is continuing speculation that Mr dos Santos may decide to stand down in the next year or two, the president continues to emphasise the importance of policy continuity. This suggests that even if he did decide to bow out, he would seek to exercise influence from behind the scenes.

Key changes from last month

Political outlook

The largest opposition party, UNITA, has appointed the son of the late rebel leader, Jonas Savimbi, to lead its urban mobilisation campaign. This signals UNITA's combative mood and could lead to more street protests.

Angola's parliament has begun to debate the draft 2013 budget, which projects the first budget deficit since 2009. Quasi-fiscal operations from Sonangol, the state oil company, are being moved to the central budget.

Economic policy outlook

The central bank lowered the benchmark interest rate to 10% on January 28th, in the first change in the rate in a year. The 25-basis-point cut was expected, as inflation fell to a record low in December 2012.

Economic forecast

The IMF has revised its real GDP estimate for 2012 upwards, to over 8%, from 6.8% previously. Economic activity was boosted by a recovery in oil production as well as robust expansion in the non-oil sector. Crude oil production in 2012 was 1.75m barrels/day (b/d), up by 5.4% from 1.66m b/d in 2011. The short-term hydrocarbons outlook is bright, but a global oil supply glut in the medium term could damage the Angolan economy.

Chevron (US) will proceed with the US$5.6bn development of the Mafumeira Sul oil project. The project is expected to start production in 2015 and to pump 111,000 b/d of oil and 10,000 b/d of liquefied natural gas.

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