Next year Angola will have solid growth and with a budget surplus.
Angola projected accelerating economic growth of 7.6 percent next year and a budget surplus due to improved output from oil and other sectors, the official Angop news agency said on Friday. In a budget speech to parliament,Finance Minister Carlos Alberto Lopes predicted 6.7 percent growth for this year, much higher than an International Monetary Fund projection this week of 2.5 percent growth for the southern African country. The 2010 estimate is also different from the 4.5 percent forecast by President Jose Eduardo dos Santos in October, raising questions about the coordination of policy-making in Africa’s second-biggest oil-producer. For 2011, Angop said Lopes projected an increase in official receipts to 3.39 trillion kwanza, leading to a surplus of 2 percent of gross domestic product (GDP).
The excess would be used to help pay down a debt stock of $32.5 billion, equivalent to 38.2 percent of annual output, the agency added. Official reports of Lopes’ budget address made no mention of domestic or international borrowing, despite the government’s stated intention since November 2008 to launch a debut Eurobond of up to $4 billion. The budget in the OPEC member was based on daily oil production of 1.9 million barrels, with a “conservative” forecast price of $68 a barrel. Brent crude was at nearly $86 a barrel on Friday.
Angola is the world’s fifth-biggest diamond producer, and Lopes forecast 2011 production of the precious stones at 10.76 million carats at $98.3 per carat, an increase from this year’s estimated output of 9 million carats. Overall inflation for 2011 was projected at 12 percent. The oil minister said this month Angola would open a stock market only after inflation drops to single digits, suggesting managers of African frontier equity funds will have to wait at least another year for the chance to buy Angolan shares.
This dynamic economic growth by Angola shouldn’t surprise many. The country is managing it’s resources very well, the business investment environment has greatly improved. All of this translates into solid economic growth.