Angola: Economy gains steam in the third quarter
Growth hits nine-and-a-half-year high: The economy gained traction in the third quarter, expanding 5.5% year on year, outpacing Q2’s 4.1% rise and marking the best result since Q1 2015. On a seasonally adjusted quarter-on-quarter basis, economic activity rebounded from Q2’s downwardly revised 0.1% decline, rising 2.9% in Q3—a near eight-year high.
Broad-based acceleration fuels momentum: The annual improvement was due to oil sector growth accelerating to 3.0% yoy in Q3 from 2.6% in Q2. In particular, oil production growth edged up to 1.5% in the quarter (Q2: +1.1% yoy).
Similarly, non-oil output rose 6.3% year on year (Q2: +4.7% yoy), marking the best result in three years: Manufacturing output growth more than doubled from Q2, and construction activity gained steam. Further supporting momentum, agricultural output growth ticked up, as did services output, propelled by public administration plus wholesale and retail trade rising at sharper clips. Lastly, the transport sector returned to growth. All these positive developments outweighed a softer increase in the mining sector—which nonetheless rose by over 40%.
Economy to lose steam ahead: Our panelists forecast the economy to end the year on a sour note, expecting growth to have slowed to a crawl: Tight borrowing conditions and above-target inflation likely continued to drag on domestic demand, and maturing oil fields likely capped growth in the hydrocarbons sector. That said, economic growth will have roughly tripled from 2023 in 2024. Moving to 2025, our panel expects momentum to slow due to softer expansions in public spending and exports, but a faster increase in private consumption will limit the slowdown. Higher-than-expected interest rates are a key downside risk.
Panelist insight: Oxford Economics’ Gerrit van Rooyen commented:
“We expect the Angolan economy to cool moderately in […] 2025 due to a slower expansion in the oil sector, widespread drought in the southeast, and intermittent foreign exchange shortages. Elevated inflation and fiscal consolidation are also thwarting the potential for higher overall economic growth. We forecast real GDP growth to moderate from 3.4% in 2024 to 2.5% next year.”
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