Angola forecasts economic growth of 7.6% in 2011 and a budget surplus

Nov 18, 2010 12:00 AM

By Candido Mendes

Angola, Africa’s second-biggest oil producer, is expected to achieve an economic-growth rate of 7.6 % in 2011, boosted by an expanding non-oil industry, Finance Minister Carlos Alberto Lopes said. Oil production, which ranks second on the continent to output in Nigeria, is forecast at 1.9 mm bpd, Lopes told lawmakers in his annual budget presentation recently in Luanda, the capital. The budget is based on a “conservative” estimate that oil will trade at $68 pb.
“This budget was set in an environment of recovery from the effects of the global financial crisis,” .

Spending in the year ahead will total 3.39 tn kwanza ($36.8 bn) and revenue is forecast at 3.23 tn kwanza, leaving a budget surplus of 164 bn kwanza, or 1.9 % of gross domestic product, Lopes said. Angola is rebuilding after a 27-year civil war that ended in 2002. The International Monetary Fund said previous month that economic growth is expected to accelerate in 2011 from 2.5 % in 210 as the effects of production problems in the oil industry and “fiscal retrenchment” unwind.
On Oct. 15, 2010 President Jose Eduardo dos Santos forecast economic growth at 4.5 % in 2010 and 8 % in 2011. Angola’s oil industry is expected to expand 2.3 %, with non-oil growth forecast at 11 %, Lopes said.

Inflation in the year ahead is expected to be 12 %, Lopes said. The forecast compares with an estimate of less than 10 % predicted in the government’s 10 budget. The annual inflation rate climbed to 16 % in October 2010 from 15.7 % a month earlier, driven by higher public-transport costs. Angola will spend $989 mm settling foreign debt and 904 bn kwanza repaying domestic debt, Lopes said. The government has paid $2.7 bn of $6.8 bn in debt owed to Portuguese and Brazilian construction companies, Dos Santos said previous month.

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