2013-01-15 13:09:16 - Angola Business Forecast Report Q1 2013 - a new country guide report on companiesandmarkets.com
We are forecasting robust real GDP growth of 8.7% in 2013 as major new oil fields come online, while investment and private consumption will continue to expand their share of GDP. Nevertheless, the economy´s heavy reliance on oil will continue leave Angola´s headline growth beholden to production delays and disruptions.
The ruling Popular Movement for the Liberation of Angola (MPLA)´s landslide victory in the August 31 general election is unlikely to have a discernible impact on policy direction or political stability over the short term and we expect continuity to be the order of the day in 2013.
Going into 2013 we expect to see a broad continuation of the stable inflationary conditions that saw headline inflation reached historic lows in H2
2012. That said we expect the twin pressures of an economy gathering steam and chronic structural bottlenecks to limit the potential for a sustained drop in price growth.
Major Forecast Changes
We have revised down our 2012 growth estimate for the Angolan economy to 8.4% from 9.9% and bumped up our 2013 projection to 8.7% from 8.1%, as the rebound in oil exports in 2012 has been less front-loaded than anticipated. We now believe the introduction of new capacity will be more evenly distributed across 2012 and 2013.
Key Risks To Outlook
The core risk to Angola´s economy is a dramatic change in oil prices or a disruption of production. However, with soaring exports and production surging, oil prices would need to fall dramatically to exact a significant toll on the economy. Risks are further mitigated by the government´s conservative US$77/bbl budget assumption for the price of oil.
Given that our forecasts only include planned oil projects, the upside potential posed by the country´s vast and unexploited sub-salt reserves present a major upside risk to our forecasts over the medium-to-long term.
The main political risks will likely come from within the ruling party itself, with the issue of presidential succession having the potential to divide the party and slow policymaking.
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