afrol News, 16 November - Latest data from Angola's Ministry of Finance indicate that GDP growth will be as low as 2.5 percent in 2010, catering for a per capita growth close to zero. The boom years have passed.
The disappointing scenario was announced by the International Monetary Fund (IMF) yesterday, following meetings with Finance Minister Carlos Alberto Lopes and other government officials in Luanda. The IMF for the second time had adjusted its GDP growth projections for Angola downwards.
Angola was living a veritable boom after the end of the civil war, to a great extent driven by the quick expansion of the country's oil production. In 2007, GDP growth reached a record 20.3 percent, and growth staid at an impressive 13.3 percent in 2008.
However, the crisis hit Angola relatively hard in 2009, as national oil exports reduced their value by over 5 percent. GDP growth last year was at only 0.7 percent, with the non-oil sector now being the main drive in Angola's economic growth.
This year, according to figures from the Finance Ministry and the IMF, growth is somewhat rebounding, but only is set to reach a disappointing 2.5 percent. Only two months ago, the IMF still predicted a GDP growth rate of 5.0 percent for 2010.
The non-oil sector is expected to contribute most also to this year's economic growth in Angola. Higher oil prices to a certain degree compensate for production cuts this year.
According to IMF analyst Seán Nolan, next year will see far higher growth rates in Angola. The Angolan economy this year had been "adversely affected by temporary production problems in the oil sector and by fiscal retrenchment, but a solid pick-up in the pace of growth is expected for 2011 as these temporary effects unwind," Mr Nolan said.
Angolan authorities nevertheless were urged to remain vigilant and get a better control of their national budgets than was the case in the boom year. "In setting the 2011 budget, the Angolan authorities face the challenge of balancing the need to increase spending on essential infrastructure throughout the country with the need to further build foreign reserves," Mr Nolan advised.
"The global economic outlook is more than usually uncertain, further complicating policy choices while providing a strong case for proceeding gradually in entering into new spending commitments," the IMF analyst added. Government was strongly advised to "strengthening administrative capacity in the economic ministries."
Finance Minister Lopes agrees there were "significant risks" to Angola's economic development "emanating from the fragile global economic recovery and the high volatility of international oil prices." He pledged to "further strengthen" Angola's economic policies "in a wide range of areas."
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