World Bank predicts Angola 2010 growth up to 7.5%

Tuesday, 02 February 2010

Angola's economy is set to rebound in 2010 with growth up to 7.5 percent, after a sharp slowdown last year when growth was estimated at no more than 0.5 percent, the World Bank said Monday.

Africa's biggest oil producer saw its coffers drained in 2009 due to the fall in crude prices. This triggered a 30 percent plunge in national reserves, sparking a 25 percent drop in the value of the kwanza against the dollar compared to 18 months ago.

The World Bank in May predicted Angola's economy would contract by three percent in 2009, but a report Monday estimated growth at -0.5 to 0.5 percent -- a severe comedown after the previous four years of double digit expansion.

Ricardo Gazel, the bank's senior economist in Angola, said that this year oil production was likely to increase to 1.9 million barrels per day, compared to 1.79 barrels during 2009.

"The perspectives for the economy have improved substantially in 2010, with real GDP growth rate expected to stay between 6.5 and 7.5 percent, depending on the performance of the non-oil sector," he said in the report.

"The economic music will be executed at a faster pace, but no too fast, an 'allegro ma non troppo'," he said, using a musical term to indicate a quick but steady pace. However, despite the better economic outlook, the report noted that end of year inflation reached 13.99 per cent, rising for the second year in a row.

"The economic scenario has improved dramatically from 2009, but the old challenges remain. First, the high dependency on oil will remain a reality for some years in the near future," Gazel said. Angola vies with Nigeria as Africa's largest oil producer, and is a major supplier of crude to China and the United States.

Sapa-AFP