Cuanza Norte, Angola, Nov. 19, 2024 (Lusa) - The National Bank of Angola on Tuesday estimated that the country's economic growth will reach 4% by the end of the year, while inflation should continue to fall, settling at around 27%.
‘Taking into account the dynamics of GDP (Gross Domestic Product) and the information resulting from monitoring national economic activity, the National Bank of Angola estimates that economic growth at the end of the year will be around 4%,’ said BNA governor Manuel Tiago, who was speaking today in Ndlantando, Kwanza Sul province, at the last meeting of the BNA's Monetary Policy Committee of 2024.
According to the national accounts released by the National Statistics Institute, Angola's GDP grew by 4.3% in the first half of 2024, driven mainly by the positive performance of the oil (4.6%), diamond (33.3%), transport and storage (17.2%) and electricity and water (8.7%) sectors.
Inflation continued its downward trend for the third month in a row, standing at 29.17% in October, compared to 29.93% the previous month. This trend should continue in the coming months.
‘The prevailing conditions in the economy, marked by the availability of a greater supply of high-consumption products, combined with adequate monetary conditions and the relative stability of the exchange rate, have contributed to the slowdown in inflation,’ he said.
The MPC decided, however, to maintain the main key rate (BNA rate) at 19.5%, the interest rate on the marginal lending facility at 20.5% and the interest rate on the marginal lending facility at 18.5%, despite the downward trend in inflation, maintaining that its level remains high ‘requiring the maintenance of a prudent monetary policy’.
Manuel Tiago pointed out that the conduct of monetary policy in 2024 ‘has taken place in a challenging macroeconomic context’ with ‘irregularity in the supply of goods, the gradual elimination of fuel subsidies, adjustments to communication, transport and education prices, as well as the persistent rise in health class prices,’ leading to an estimate that inflation at the end of the year will be around 27%.
The stock of national currency credit to the economy totalled 5.5 billion kwanzas in October, an increase of 2.6% compared to September and an accumulated variation of around 20% since the beginning of the year, or 909 billion kwanzas in absolute terms.
In the external sector, the goods account balance reached 1.6 billion dollars in October, representing a total of $19.2 billion in accumulated terms. This corresponds to a relative increase of 7.4%, or $1.3 billion, compared to the same period in 2023.
The improvement in the goods account surplus year-on-year was due to an 8.8% reduction in imports and a 0.7% increase in export earnings.
The stock of international reserves in October totalled $14.75 billion, corresponding to a coverage level of 7.84 months of imports of goods and services.
The governor of the BNA emphasised that the reduction in international reserves compared to the previous month was due to the sale of $250 million to the market by the National Bank of Angola, with the prospect of a recovery in the level of international reserves that would raise the stock to around $15 billion by the end of the year.
The next meeting of the Monetary Policy Committee will be held in Luanda on 20 and 21 January 2025.
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