Fitch Ratings anticipates a reduction in Angola’s public debt, projecting a decrease from 73.7% of GDP in 2023 to 63.9% by the end of 2024, and further down to 58.6% in 2026.
This forecasted decline is attributed to robust nominal GDP growth and primary surpluses, which are expected to counterbalance the effects of exchange rate depreciation on the substantial portion of external debt, constituting 70% of the total.
The updated projections also consider the rebasing of Angola’s nominal GDP by the National Statistics Institute in May 2024, resulting in a 13.1% increase in the 2023 GDP figures.
Despite these positive indicators, Fitch maintains Angola’s Long-Term Foreign-Currency Issuer Default Rating at ‘B-‘, with a stable outlook. This assessment reflects ongoing challenges, including weak governance indicators, elevated inflation, high levels of foreign currency-denominated public debt, and significant dependence on commodities.
On the positive side, Angola benefits from substantial international reserves, current account surpluses, and manageable debt repayment obligations, supported by favourable international oil prices.
Looking ahead, Angola faces external debt amortisations of $6.2 billion in 2025 (5.2% of GDP) and $5.4 billion in 2026 (4.2% of GDP), following an estimated $5.4 billion in repayments for 2024. These obligations are expected to be met through a combination of government oil revenues, disbursements from bilateral and multilateral sources, financing lines from commercial banks, and liquidity in escrow accounts related to oil-backed loans to China.
Fitch also forecasts a government deficit of 2.3% of GDP in 2024, consistent with 2023 figures, with a slight widening to 3.3% in 2025 and 2.8% in 2026. This trend reflects anticipated declines in government revenue, primarily due to lower oil prices, not fully offset by reductions in expenditure.
In terms of economic growth, Fitch projects a real GDP increase to 3.2% in 2024, up from 1.0% in 2023, largely driven by a recovery in crude oil production. Oil output is expected to rise to an average of 1.13 million barrels per day (mbpd) in 2024, compared to 1.1 mbpd in 2023.
These projections underscore the complex interplay of factors influencing Angola’s economic trajectory, highlighting both the progress made and the challenges that remain.
