(Ecofin Agency) - Angola's heavy dependence on oil has weakened the economy in recent years. To boost growth, the government has embarked on an IMF-supported economic program. For the Bretton Woods institution, the program is on track despite persisting risks. 

In Angola, GDP growth will continue this year, and inflation will decline, according to a release published by the IMF last Thursday.

According to the Fund, growth will reach 3.5 percent this year, 0.7 percentage points higher than in 2022 and 2.4 percentage points higher than in 2021. This growth will be supported by the authorities' structural reform program supporting the non-oil sector. The resilience of the non-oil sector, as well as higher oil prices and improved oil production, will also contribute to the economy's good health, pushing overall growth to around 4 percent over the medium term, the IMF says.

Inflation fell by more than 13 percentage points from 27.0 percent at the end of 2021 to 13.8 percent at the end of 2022. For this year (2023), the IMF projects it to be 12.3 percent. The figure is expected to continue its gradual downward trajectory, moving into single digits by 2024. This decline will be "driven by lower global food prices, a stronger kwanza, and previous efforts by the central bank to tighten monetary policy."

While the economic momentum in the Central African country is commendable, the Fund also notes several risk factors. Persistent vulnerabilities and high global uncertainty, and particularly persistent risks to price stability, could dampen growth, it says. The institution, therefore, recommends ambitious, growth-enhancing adjustments to achieve the objectives of the reform program.

"The public debt-to-GDP ratio fell by an estimated 17.5 percentage points of GDP to an estimated 66.1 percent of GDP, aided by a stronger exchange rate. The current account is estimated to have remained in a large surplus in 2022, while foreign currency reserve coverage remained adequate," the IMF release reads.

Jean-Marc Gogbeu