In the most recent assessment report, the IMF highlights the resilience of non-oil activity in the country, underlining that "non-oil growth was broad-based, despite a challenging external environment".
The IMF Executive Board, which concluded the 2022 Article IV consultation with Angola, believes that 4 percent growth is achievable, as the Angolan authorities' structural reform agenda is centered on the non-oil sector.
Another highlight in the IMF report is inflation, which "decreased significantly" to 13.8 percent at the end of December, driven by "lower global food prices, a stronger Kwanza and previous efforts by the Central Bank to hold monetary policy.
Inflation should continue its gradual decline, reaching single digits in 2024, according to the International Monetary Fund.
The non-oil primary deficit widened in 2022 following over-budget capital expenditures and the higher-than-expected cost of fuel subsidies.
However, the public debt-to-GDP ratio declined by 17.5 percentage points to 66.1 percent, aided by a stronger exchange rate. In 2022, the current account remained positive (surplus), while "reserves in foreign currency maintain adequate coverage".
The IMF points out that the General State Budget for this year foresees the resumption of the fiscal adjustment, necessary to approximate the budgetary targets of the authorities with the medium-term debt and protection against debt vulnerabilities.
For the Fund, downside risks to the near-term outlook include an expected decline in global oil prices and pressures on global food prices, as well as adverse weather conditions that could affect the agricultural sector.
