Angola Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

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  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Angola Country Risk Report
Product Price
$1,195.00

Core Views

  • Angola will face another challenging year in 2016 as low oil prices, a weak investment climate, and rising inflation all contribute to low real GDP growth. The outlook improves slightly for 2017 as accelerating oil production supports exports, but the structural weaknesses in the economy will remain largely unaddressed.

  • A depreciating currency, the removal of subsidies, and an increasing money supply will see inflation continue to rise through H116 in Angola, prompting the monetary policy committee of the Banco Nacional de Angola to make furthers hikes in the policy rate.

  • Angola's budget will record another heavy deficit in 2016 as even lower oil prices offset the impact on government revenues of several devaluations made to the local currency. Furthermore, the government's clear intention to increase expenditures over the course of the year will present another headwind to balancing the books.

  • The continued decline in oil prices will push Angola's current account deficit further into the red, despite falling imports. The deficit will be largely financed through the selling of central bank reserves and the increase in external debt issued by the government. Price stability and increasing production in the oil sector will offer some brief respite in 2017.

  • In the eventuality that Angolan president, Jose Eduardo Dos Santos, sticks to his word and steps down from office in 2017, any political succession will continue the struggle between elites within the current status-quo and their increasingly vocal grassroots critics. Any attempt to keep the presidency in the hands of the Dos Santos family will be particularly damaging, incurring a backlash both from snubbed elites and the wider population.

Major Forecast Changes

  • Revisions to our oil production forecast have had a significant bearing on our projections for all macroeconomic indicators, as the economy is highly dependent on the oil sector. GDP growth, the current account, and the fiscal deficit are all in a less robust position as a result.

Key Risks

  • The government decides it can no longer dedicate the amount of reserves required to sustain the kwanza's stability, and instead lets the currency free float at the market rate. This would likely lead to significant depreciation and subsequent inflation as import costs rose.

  • Public opposition to the incumbent government reaches boiling point and President Jose Eduardo dos Santos is forced out of office, leaving a power vacuum in his place. Populist groups rise to the fore in this environment, increasing the risk of industry nationalisation.

Macroeconomic Forecasts (Angola 2014-2017)
Indicator 2014 2015e 2016f 2017f
e/f=BMI estimate/forecast. Source: National Sources/BMI
Nominal GDP, USDbn 146.3 107.4 97.8 108.1
Real GDP growth, % y-o-y 4.8 2.2 2.7 4.4
Consumer price inflation, % y-o-y, eop 7.5 14.3 17.2 13.0
Exchange rate AOA/USD, eop 102.87 135.23 173.00 180.00
Budget balance, % of GDP -5.7 -8.7 -8.1 -2.0
Current account balance, % of GDP -2.5 -7.7 -9.0 -3.1
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Oil Weakness Keeps Growth Outlook Low
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
11
Deficit Will See Little Improvement As Revenues Stagnate
11
Structural Fiscal Position
12
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
12
External Trade And Investment Outlook
13
Current Account Deficit Will Peak On Further Oil Weakness
13
Outlook On External Position
14
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
14
TABLE: TOP 5 GOODS IMPORTS IN 2014
15
Monetary Policy
16
Further Rate Hikes Inevitable On Climbing Inflation
16
TABLE: TOP 5 GOODS EXPORTS IN 2014
16
Monetary Policy Framework
17
Chapter 2: 10-Year Forecast
19
The Angolan Economy To 2025
19
Opportunities After Years Of Pain
19
TABLE: LONG-TERM MACROECONOMIC FORECASTS
19
Chapter 3: Political Outlook
23
SWOT Analysis
23
BMI Political Risk Index
23
Domestic Politics
24
Mounting Risks From Likelihood Of Managed Succession
24
TABLE: POLITICAL OVERVIEW
24
Long-Term Political Outlook
25
Path To Political Inclusion Uncertain And Slow
25
Chapter 4: Operational Risk
29
SWOT Analysis
29
Operational Risk Index
29
Operational Risk
30
TABLE: OPERATIONAL RISK
30
Trade Procedures And Governance
31
TABLE: SUB-SAHARAN AFRICA - TRADE PROCEDURES AND GOVERNANCE RISK
32
Vulnerability To Crime
33
Chapter 5: BMI Global Macro Outlook
37
Global Macro Outlook
37
Tail Risks Mounting Amid Sub-Par Growth
37
TABLE: GLOBAL ASSUMPTIONS
37
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
38
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%)
38
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
39
TABLE: MACROECONOMIC DATA & FORECASTS
41

Assess your risk exposure in Angola with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Angola with confidence.

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