Luanda, Nov. 19, 2024 (Lusa) - Angola's Banco Millennium Atlântico (BMA) has estimated that the country's inflation rate could reach 26.89% by December, if the month-on-month price change reaches an average of 1.75% in the final two months of 2024.
According to the BMA's weekly analysis, released on Monday, annual inflation in October was 23.39%, up from 21.88% in October 2021, 11.95% in the same month in 2022 and 14.63% in 2023. It noted that if the monthly price change reaches an average of 1.75% in November and December, the inflation rate could be 26.89% by the end of 2024.
"After the acceleration seen between May 2023 and April 2024, the slower pace of price increases, especially in recent months, has been fundamental for less intense management of restrictive monetary policy," reads the BMA's assessment of Angola's inflation rate.
In October 2024, the year-on-year variation in inflation in Angola stood at 29.17%, marking the third consecutive year-on-year slowdown, the Angolan bank points out, noting that in monthly terms inflation reached 1.55%, a slowdown of 0.08 of a percentage point compared to September, contrary to the larger rises recorded in August (1.61%) and September (1.63%).
'Food and non-alcoholic beverages’ were the classes that contributed most to the increase in the general price level in October, with 1.01 percentage points, followed by 'Miscellaneous goods and services', 'Health' and 'Clothing and footwear’, according to Angolan's National Statistics Institute (INE).
The draft state budget of 2025, approved on its first reading in parliament last week, points to the inflation rate being 23.4% at the end of this year, while in 2025 it could fall to 16.6%.
The BMA argues that the expected slowdown in the country's inflation rate should reflect the increase in non-oil production, "with the 2025 State Budget proposal forecasting growth of 5.15%, higher than the 4.62% figure presented in the 2024 State Budget."
The risks of accelerating exchange rate depreciation, the reversal of the trend of decelerating world inflation and the interruption of international supply chains, "in a context in which global geopolitical risks remain, could be the main factors pushing for a further slowdown in inflation in Angola," the bank argues.
On Tuesday, the Monetary Policy Committee (CPM) of the National Bank of Angola (BNA) released the results of its 120th ordinary meeting, which began on Monday in Kwanza Norte province.
The committee decided to keep its key lending rate, known as the BNA rate, at 19.5% in September and the liquidity-providing and liquidity-absorbing interest rates at 20.5%.
In September, the BNA decided to maintain the basic interest rate, known as the BNA rate, at 19.5% and the liquidity-providing interest rate at 20.5% and the liquidity-absorbing interest rate at 18.5%.
The central bank's governor, Manuel Tiago Dias, said at the time that these decisions were justified by the need to maintain adequate monetary conditions to slow the pace of price growth in the economy and to reduce inflationary pressures in the short term.
DAS/ARO // ARO.
Lusa
