Inflation in Angola will rise to 24% in the first half of the year

Consultancy Oxford Economics this Thursday raised its forecast for price growth in Angola, expecting a rise of up to 24% this semester, down to an average of 21.8% for the year as a whole.

“We expect the inflation rate to peak at over 24% at the end of the first half of the year compared with the same period in 2023 due to the continued impact of exchange rate depreciation on imported consumer goods,” it said in a commentary on the January inflation report, which increases the forecast price rise this semester by one percentage point.

Inflation in Angola accelerated to 21.99% in January, the highest in 18 months and an increase of 9.44 percentage points over the same month, according to the Angolan National Institute of Statistics.

According to the FIR, the national consumer price index recorded a deviation of 2.49% between December 2023 and January 2024, the highest in the series available in the FIR, which covers 36 months (from January 2021 of the year).

Monthly inflation has been rising for 15 consecutive months, similar to annual inflation, which has continued to rise since April 2023.

“The severe depreciation of the kwanza since May 2023, when the currency traded at its worst rate of close to 833 kwanza to the dollar, has led to a resurgence in food inflation,” the analysts wrote in a commentary sent to investors that Lusa had access to.

Additionally, they add, “cuts in fuel subsidies have begun to weigh on transport inflation, with inflation at its highest level since July 2022.”

According to the Africa arm of British consultancy Oxford Economics, the National Bank of Angola is expected to keep the official exchange rate at between 830 and 845 kwanzas per dollar until the end of this year, with average inflation rising by 13.6% in 2023 to 21 ,8%. this year.