LUANDA/NEW YORK: The International Monetary Fund (IMF) has lowered Angola’s economic growth forecast for 2025 to 2.1% from 2.4%, citing weaker oil exports, and warned that the country faces increasing risks in managing its debt.
The IMF stressed that Angola must limit borrowing, reduce public spending and adopt greater flexibility in its foreign exchange rate to stabilise the economy. The revision follows a May staff assessment mission to Luanda, which had already cut the growth outlook from an initial 3% for the year.
“Angola has been hit by volatility in oil prices and sovereign spreads and oil production weaknesses in the first half of 2025 have amplified these shocks”, the IMF said.
The Fund said Angola’s capacity to repay debt remains “adequate” but cautioned against overreliance on domestic financing or costly short-term external debt. Excessive domestic borrowing could increase banks’ exposure to sovereign risk, while short-term external debt may lead to higher debt servicing costs, undermine investor confidence and delay access to favourable market financing.
Earlier this year, Angola had to pay $200 million in extra security to JPMorgan after the price of a bond used as collateral for a loan dropped, though it later recovered the funds when the bond’s value rebounded.
The IMF noted that Angola faces additional challenges from potential declines in crude oil prices, tightening external financing conditions and the need to reduce oil-backed loans to China to ease fiscal pressures.
Oil-exporting Angola, like other small open African economies, has been affected by global market volatility and trade disruptions, including US tariffs earlier this year. The IMF warned that careful fiscal management and structural reforms remain critical to sustain growth and maintain investor confidence. — Reuters
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