Angola: EIU lowered growth forecast of economy for 2016

(AGI) - Luanda, Sep. 14 - The Economist Intelligence Unit (EIU) has lowered growth forecast of Angola's economy for this year, now anticipating an expansion of only 0.6%, almost half the official government estimate. "In August, the government has lowered its growth forecast in 2016 for the second time in just over a month, from 3.3% to 1.1%, and in July had been revised to 1.3%. But the EIU [analysis unit of British magazine The Economist] revised its own forecast to just 0.6%", writes the experts of the economic. In the most recent "Country Outlook" about Angola, sent this week to the investors, the EIU expects the rest of this decade the country to accelerate economic growth to 3.5% in 2018, before further slowdown to 2.5% in 2020. In the analysis of policy priorities for the near future, the EIU believes that "is need a fundamental rebalancing of the economy", adding that "it will continue to be the focus of the on-going negotiations with the International Monetary Fund under Article IV, despite the authorities appear to have deleted an Extended Fund Facility to three years, which would probably include more requirements on transparency and the deregulation of the exchange rate". Even without a financial assistance agreement, experts from The Economist consider that the Fund "will continue to encourage the authorities to restore macroeconomic balance and build reserves, reducing the non-oil budget deficit and leverage more flexible exchange rate, supported by a tighter monetary policy to curb inflation", which is close to 40%. The IMF support could reach USD 4.5 billion, requiring in turn disturbed and cuts in various areas, what would happen on the eve of general elections in August 2017, a factor that a delegation of that body did admit, last June, as worrying. Due to the fall in revenues from the export of oil in the first half, the government submitted to parliament a draft 2016 budget revision cutting the average forecast of crude oil barrel exported in 2016 from USD 45 to USD 41. The Budget revised will be voted on next Friday. With this, economic growth down from 3.3% early, compared to 2015, to 1.1%, and inflation due to currency crisis, increased from 11% to 38.5%, according to government estimates. (AGI) .