The consultancy Oxford Economics has revised upward its inflation forecast for Angola, predicting a 20.8% increase in prices this year, primarily due to the effects of the removal of fuel subsidies on transportation.
“The government’s cuts in fuel subsidies counteracted the disinflation process, increasing transport prices in July and August; therefore, we have revised our average inflation projection for 2025 from 17.2% to 20.8% to account for the slowdown in the pace of disinflation,” stated the note sent to clients.
In the analysis accessed by Lusa, the African department of Oxford Economics emphasizes that the rise in prices will continue to slow down, but not enough to register a decrease.
“The lower inflation rates recorded in August support our projection that price growth will continue to slow in 2025; the recent start of the Begónia and CLOV3 oil projects will provide a slight boost to oil production and exports, which will ease pressure on Angola’s exchange rate, thus curbing potential inflationary pressures,” analysts wrote, predicting the exchange rate to remain around 917 kwanzas per dollar.
Angola’s inflation rate slowed to 18.9% in August compared to the same month last year, marking a decline from the 19.5% increase recorded in July year-over-year.
This marked the 13th consecutive decline in inflation for the second-largest oil producer in sub-Saharan Africa, which had faced an increase of over 30% in July of the previous year.
“The inflation rate has been steadily decreasing in 2025 after supply chain bottlenecks, fuel subsidy cuts, severe currency depreciation, and reduced oil production led to a rise in inflation to a high of 31.1% in July 2024, when in June 2023 it was 11.25%,” the analysts concluded.
