(Ecofin Agency) - Angola could reduce its budget deficit to 1% by the end of this year, José de Lima Massano (photo), governor of the country’s central bank indicated last Monday.

According to the official’s statements reported by Reuters, this performance that represents an improvement compared to the 7% budget deficit registered in 2017 should be stimulated by the macroeconomic stabilization plan initiated by Angola’s president Joao Lourenço, since coming into office.

Marked, among others, by a 46% depreciation of the local currency (Kwanza), this plan helped reduce the gap between the exchange rate in the formal market and that in informal one by 20%, against 150% at the beginning of 2018.  

Though the debt burden is rising (64% of GDP in 2017), the official indicated that his country was still planning to solicit the bond market to fund its development projects in a context of diminishing dollar reserves in the country.

Last August, Angola announced that it initiated negotiations with IMF for a funding programme of $4.5 billion aimed at supporting the macroeconomic stabilization programme in 2018-2022.

Let’s note that this year, IMF expects Angola’s economy to decrease to -0.1% and rise to 3.1% in 2019.

Moutiou Adjibi Nourou