The International Monetary Fund (IMF) has revised its growth forecast for Angola in 2025, lowering it from an initial 3% to 2.4%, citing the dual impact of weakening global oil prices and tightening external financing conditions.
This revised outlook emerged after a post-financing assessment mission by the IMF to Luanda, Angola’s capital.
The Southern African country, heavily reliant on oil exports, continues to feel the squeeze of a volatile global economy. Just last month, as global markets saw a wave of risk-off sentiment.
Angola was forced to pay an additional $200 million in collateral for a $1 billion loan secured from JPMorgan. The incident highlights the vulnerability of smaller, open economies in Africa to sudden shifts in investor sentiment.
The IMF warned that “this downward revision to the outlook also poses risks to fiscal performance,” underscoring the challenges Angola faces in stabilizing its finances. The Fund noted that its executive board would further examine the findings from the Luanda visit in July.
Despite the somber economic forecast, IMF staff reported being reassured by the Angolan government’s commitment to managing emerging risks and implementing mitigating strategies. The mission was part of a “Post-Financing Assessment,” which is designated for countries with significant outstanding credit obligations to the IMF but without a current Fund-supported programme or staff-monitored arrangement.
IMF Officials Meet With President Lourenco
On the sidelines of the assessment, Abebe Aemro Selassie, Director of the IMF’s Africa Department, met with Angola’s President João Lourenço. After the meeting, Abebe emphasized “the IMF’s readiness to continue supporting Angola’s efforts” to navigate its current challenges.
The revised economic forecast reflects changes in expected oil prices, now predicted to average $66.94 per barrel in 2025. This figure is below both the IMF’s earlier forecast of $69.76 and Angola’s own benchmark of $70 per barrel in its 2025 State Budget (OGE2025). The lower oil price expectation could limit the government’s fiscal space and accelerate depreciation of the national currency, the kwanza.
Among major economic institutions, the IMF remains the most pessimistic about Angola’s short-term prospects. The World Bank, in its latest Africa’s Pulse report, anticipates 2.7% growth for Angola, while Standard Bank estimates a slightly better 2.9%. However, all these projections fall below the country’s population growth rate of 3.1% per year, suggesting stagnation in real income per capita.
The Angolan government remains more optimistic, forecasting growth at 3.8% — a revision from its earlier 4.1% projection in the OGE2025.
Inflation continues to be another major concern. The IMF projects end-of-year inflation for 2025 at a steep 20.1%. This estimate is significantly higher than the 17.5% projection from the National Bank of Angola (BNA) and the government’s own forecast of 16.6%.
Looking further ahead, the IMF projects Angola’s growth in 2026 will reach 3%, a downgrade from the 3.3% it had forecast in January.
“The rapid escalation of trade tensions and extremely high levels of political uncertainty are expected to have a significant impact on global economic activity.”
Internation Monetary Fund
The Fund anticipates that growth in advanced economies will decline to 1.4% in 2025. In particular, it sees U.S. growth slowing to 1.8%, which is “0.9 percentage points lower than projected in the January update, due to greater political uncertainty, trade tensions, and weaker demand momentum.” Similarly, euro area growth is forecast to drop by 0.2 percentage points to just 0.8%.
In emerging markets and developing economies, growth is projected to “slow to 3.7% in 2025 and 3.9% in 2026, with significant declines for countries most affected by recent trade measures, such as China,” the IMF stated.
As Angola finds itself at the intersection of global economic shifts and local fiscal challenges, the months ahead will test its ability to weather external pressures and maintain domestic stability.
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