The monthly rise in inflation in Angola is expected to continue in the second half of the year

The consultancy Oxford Economics Africa said today that the rise in inflation in Angola in April compared to the previous month would accentuate in the second half of this year, although below the historically high levels of recent years.

“Unlike most of the rest of the world, Angola recorded solid disinflation last year and lowered its interest rates, mainly due to a strengthening of the national currency last year compared to 2021 and a general decline in world food prices since May 2022,” the analysts write in a commentary on price developments in this Lusophone African country.

“The kwanza, however, has depreciated in recent quarters due to the global decline in oil prices, and we forecast it will continue to depreciate to 568.5 kwanzas per dollar by the end of 2023,” they read.

In the commentary sent to clients and to which Lusa had access, the African Department of Oxford Economics considers that “the impact of this devaluation will start to show itself in moderately higher inflation in the second half of this year, although much better than the price increase of 21.3% in 2021 and 12.1% in 2022,” the analysts write.

According to the same sources, the slowdown in inflation will support a cut in the key interest rate, which “should reach 15.5% by the end of this year.

Inflation in Angola fell again in April, in homologous terms, to 10.59% but registered a monthly variation of 0.92%, the highest in the last twelve months, according to data from the National Institute of Statistics.

The National Consumer Price Index (IPCN), released on Monday, registered a variation of 0.92% between March and April 2023, and it is necessary to go back to May 2022 to find a more accentuated variation (0.93%).

As for the consumer classes, Health was the one with the highest price increase (1.91%), also highlighting the price increases seen in Clothing and Footwear” (1.55%), Miscellaneous Goods and Services (1.45%), and Hotels, Cafes, and Restaurants (1.22%).

The Food and non-alcoholic beverages class contributed the most to the increase in the general price level, with 0.53 percentage points during April, followed by Miscellaneous Goods and Services with 0.10 percentage points, Health with 0.07 percentage points, and Clothing and Footwear with 0.06 percentage points, while the remaining classes had contributions of less than 0.06 points.

The year-on-year change stood at 10.59%, down 15.20 percentage points from the same period a year earlier.

The current year-on-year change compared to the previous month was a slowdown of 0.22 percentage points, while in monthly terms, there was an acceleration of 0.02 points.

With information from Lusa

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