Angola's economic growth prospects are on the rise as higher oil prices and sounder policies under President Joao Lourenco bring greater stability to Africa's second biggest crude exporter, the International Monetary Fund said on Friday. Angola's economy is expected to grow 2.25 percent this year from 1 percent in 2017 and should reach 5 percent in the medium-term, Ricardo Velloso, IMF division chief for Africa, told reporters in Luanda.
The IMF said Lourenco's government had supported the economy since coming to power last year by devaluing the kwanza currency, promising to reduce debt and restructuring state oil company Sonangol. He also said higher oil prices had helped.
"The Angolan economy is experiencing a mild recovery. The new administration is rightly focusing on restoring macroeconomic stability and improving governance," Velloso said. "Over the medium term, the outlook is for continued gradual recovery in economic activity but there are risks, including a decline in oil prices and slippages in implementation of the structural reforms to promote economic diversification."
The IMF said it did not consider a bailout was necessary despite Angola's heavy debt burden and high inflation, saying Lourenco's reform plans should stabilise public finances. Inflation was expected to reach 24.75 percent year-on-year by the end of the year compared to 22.72 percent in January, the IMF said.
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