Country Report Angola October 2014

Country Report Angola October 2014


Outlook for 2015-19



  • Despite a more coherent stance by opposition groups, the ruling Movimento Popular de Libertação de Angola (MPLA) is set to maintain its political domination by virtue of its control of government resources and parliament.
  • The long-serving president, José Eduardo dos Santos, may step down prior to the next elections, in 2017; according to the constitution the vice-president, currently Manuel Vicente, will succeed him.
  • The government will seek to foster the development of local industry, including via the introduction of protectionist measures. Supply-side constraints will continue to hamper the private sector, however.
  • Continued technical problems suggest that oil output will rise slightly more slowly than previously envisaged. Oil output is expected to rise from an estimated average of 1.78m barrels/day (b/d) in 2014 to 2.13m b/d in 2019.
  • Despite some slowdown in expected output growth, The Economist Intelligence Unit expects rising oil sector output and investment to drive average real GDP growth of 5.9% in 2015-19.
  • Although the reduction of fuel subsidies could lead to a rise in inflationary pressures, we expect cautious monetary policy and currency stability to keep the average annual rate in single digits in 2015-19.
  • Solid oil output will keep the trade balance in surplus. However, substantial deficits on the services and income accounts, as well as lower oil prices over 2015-19, mean that the current account will slip into deficit from 2016.


Review



  • There have been a series of heated confrontations between members of the ruling MPLA and supporters of opposition groups. Such groups are increasing their activism, but say they are facing growing political intolerance.
  • Angola has continued to lobby to secure a non-permanent seat on the UN Security Council. Such moves fit with the president's ambition to raise his international profile and boost his domestic popularity.
  • In mid-September the president announced the formation of a committee to create a new legal framework and institutional management structure for the capital, Luanda.
  • The Angolan authorities raised fuel prices on September 27th, in an effort to reduce the heavy burden of subsidies. An increasingly strained fiscal position has pushed the government to act, despite fears of a public backlash.
  • Angola's leading mobile-phone operator has announced an investment of US$1.9bn in 4G infrastructure. Better telecommunications infrastructure should help to support growth of the non-oil economy.


Country Report Angola October 2014
Highlights
Outlook for 2015-19: Political stability
Outlook for 2015-19: Election watch
Outlook for 2015-19: International relations
Outlook for 2015-19: Policy trends
Outlook for 2015-19: Fiscal policy
Outlook for 2015-19: Monetary policy
Outlook for 2015-19: International assumptions
Outlook for 2015-19: Economic growth
Outlook for 2015-19: Inflation
Outlook for 2015-19: Exchange rates
Outlook for 2015-19: External sector
Outlook for 2015-19: Forecast summary
Data and charts: Annual data and forecast
Data and charts: Quarterly data
Data and charts: Monthly data
Data and charts: Annual trends charts
Data and charts: Monthly trends charts
Data and charts: Comparative economic indicators
Basic data
Political structure