The Angolan Ministry of Economy and Planning has dismissed the possibility of an economic recession following the country’s stagnant economy in the first quarter of 2023, primarily attributed to a decline in the oil sector.
The ministry believes ongoing “structuring programs” will help reverse this trend.
Martins Afonso, the head of the Department for Macroeconomic Policy and Management, presented the Gross Domestic Product (GDP) data for the first quarter of 2023, emphasizing that the quarterly decline of -1.1% does not signify a recession.
He explained that when considering the year-on-year variation, the GDP actually grew by 0.3%.
The decline compared to the fourth quarter of 2022 was -2.3 percentage points.
Afonso clarified that the economy’s stagnation was primarily due to a significant decrease in oil production, which led to a decline in exports and foreign exchange resources.
Despite this, he maintained that the decline in GDP did not indicate a recession.
According to the Angolan National Statistics Institute (INE), Angola’s GDP showed year-on-year growth of 0.3% in the first quarter of 2023 but fell by 1.1% compared to the previous quarter.
The decline was mainly driven by a decrease in oil exploration and refining activity.
When questioned about measures to counteract the economic stagnation, Afonso highlighted the importance of structuring programs such as the grain production plan and fishing and livestock production plans.
These programs aim to diversify the economy and promote growth in the non-oil sector. Afonso also noted that the gradual decrease in the oil sector’s contribution to GDP is a significant challenge.
Despite the challenges, Afonso emphasized the positive performance of the non-oil sector, which grew by 2.8% in the last quarter.
The transport and extraction sectors were particularly noteworthy, with growth rates of 27% and 22.9% respectively.
While the oil sector continues to play a major role in Angola’s overall revenues, efforts are being made to diversify the economy and reduce dependency on oil.