Angolan economy grows 2.2% after three years of recession

 In Economy, News

After three years of recession, Angola, one of Portugal’s biggest international clients, is seeing economic recovery.

The analysis department of international ratings agency Fitch – Fitch Solutions – forecast on Wednesday that Angola’s growth will achieve 2.2% in 2019 after having suffered a contraction of 0.8% of GDP in 2018 – the third consecutive year of recession.

“We are forecasting an increase in production in oil, Angola’s main export, which will raise real GDP growth from -0.8% in 2018 to 2.2% this year”, say Fitch analysts

“The recession that has lasted three years was triggered by the fall in oil prices and reduction in oil production with the sector seeing a significant deterioration in assets quality, with a ratio of loan default at 26.7% in November last year” says the Fitch report.

This compared to an average default of 10.4% registered between 2014 and 2016” states the report sent to investors.

On Tuesday the Angolan government announced that it would proceed with a review of its General State Budget for this year “in the first quarter” owing to the “downward trend” of per barrel of oil which continues to be below Government forecasts $US68.

Today the price of a barrel of oil is fetching around $US60 on the international markets.

According to data from the Portuguese National Statistics Institute (INE), exports and sales to Portugal from Angola between January and July 2018 totalled €600 million, representing an increase of 416% on the €116 million of goods sold by Angola to Portugal in the first seven months of 2017.

Exports to Angola from Portugal have gone from €1.2Bn in 2006, to €2.2Bn in 2009, falling to €1.9Bn in 2010 and climbing to their maximum level of €3.1Bn in 2014.

Sales to Angola fell dramatically from 809 million in 2016 and €278 million in 2017. In 2014 there were 9,431 exporting Portuguese companies in Angola, a number that fell to 5,838 last year — a far cry from the 9,400 registered in 2013. Angola is currently Portugal’s 9th most important trading partner $2Bn (3.3%).