The impact of the current global crisis on Angola’s economy can be divided into three parts. First, a marginal impact on the financial sector: no stock exchange, very small inter-banking credit markets, limited transaction flows with international markets (except via Portuguese Bank), low level of banking services, low ratio of loans to deposits, etc. Nonetheless, there was a decline of around 20% in demand deposits in foreign currency in November.
Second, a favorable impact is expected on the inflation rate due to the decline in import prices, especially food and construction materials, and an appreciation of the Kwanza vis-à-vis the Euro.
Third, a large negative impact on the real economy is expected as oil prices decline to very low levels. Despite positive real growth, nominal GDP in billion of dollars would decline from 85.5 in 2008 to 77.3 in 2009. Lower government revenue implies lower government expenditures, the main source of demand for the non-oil sector. The proposed budget for 2009 includes: oil at US$55 per barrel; the lowest growth rate in expenditures in the last years; a negative real rate of growth for current expenditures; and a budget deficit of 7.7% of GDP in 2009.
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