afrol News, 21 November - The government of Angola has released its draft budget for 2006, containing optimistic economic figures. Real GDP growth is predicted at almost 30 percent, with the non-oil sector growing fastest. The budget foresees a relatively modest deficit, compared to earlier years, and a dropping inflation.

The government of Angola widely has outlined a macroeconomic framework for the 2006 draft budget, which aims at an annual inflation rate of 10 percent for 2006, according to a report from the state Agência Nacional para o Investimento Privado (ANIP).

At last year's prices, real growth in GDP in 2006 is forecast at 27.9 percent in the budget draft. While the country's dominant oil sector is expected to register an increase of 11.9 percent, the non-oil sectors are expected grow even faster next year. Luanda foresees a growth of 37.2 percent in the non-oil sector.

The estimated real GDP growth for 2006 is fairly optimistic in the post-war country. GDP growth has been estimated at 127.0 percent in 2004 and at around 13.6 percent this year. Most of this has been driven by the revitalised oil sector, where much foreign capital has been invested since the end of the civil war. From next year on, Luanda authorities expect to observe more results from investments in other sectors as well.

Angola's annual crude oil production is predicted to reach 597.1 million barrels next year, at an average export price of US$ 45 per barrel. This is a modest prediction, given today's oil price at about US$ 56. Many other oil dependent countries have budgeted with oil prices over US$ 50 per barrel for next year.

The Angolan government projections further call for fiscal revenue of 1.415 billion kwanzas, or 41.8 percent of GDP, with about 19.9 percent coming from outside the oil sector. Budget expenditures should amount to 1.6374 trillion kwanzas, representing 48.3 percent of GDP, up 13.6 percent over this year, ANIP quotes Luanda government sources.

"The current account should fall from 78.8 percent to 54.8 percent of total expenditures while the capital account should grow from 24.2 percent to 45.2 percent," the state investment agency reports from the budget draft.

The budget deficit for 2006 is thus estimated at 6.6 percent, or roughly 222.4 billion kwanzas. The budget should allocate 86.5 billion kwanzas, or 2.6 percent of GDP, for stabilising the public debt, with a projected cash-based budget deficit of about 8.3 percent of GDP, ANIP adds.

The cash deficit, calculated at roughly 282.1 billion kwanzas, should be partly met with 111.9 billion kwanzas in treasury reserves and the issue of some 36.1 billion kwanzas in treasury bonds. Foreign financing equivalent to 89.5 billion kwanzas and foreign credit lines worth 523.1 billion kwanzas were also set to be used to finance the cash deficit, according to the government.

By staff writer

© afrol News

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