IMF Flags Rising Risks to Angola’s Debt Repayment Capacity Despite Strong 2024 GDP Performance
The International Monetary Fund (IMF) Executive Board has concluded its 2025 Post-Financing Assessment (PFA) with Angola, cautioning that while the country’s repayment capacity remains adequate, risks have intensified amid weaker oil revenues and tighter external financing conditions.
Angola’s economy recorded robust growth in 2024, with real GDP expanding by 4.4 percent on the back of stronger oil output and a revitalised non-oil sector. The current account surplus widened to 5.4 percent of GDP, while gross reserves rose to $15.8 billion, equivalent to 7.7 months of import cover. Inflation decelerated sharply to 19.5 percent in July 2025 from a peak of 31.1 percent a year earlier, and the public debt-to-GDP ratio eased to 60 percent, supported by higher nominal growth and fiscal surpluses.
However, the Fund noted that Angola’s fiscal position has deteriorated in 2025 due to lower oil prices and production challenges, with the fiscal deficit projected to widen to 2.8 percent of GDP from 1 percent in 2024. External debt service pressures also remain elevated. Growth is expected to decelerate in the near term before recovering to about 3 percent over the medium term, anchored by structural reforms and economic diversification.
IMF Directors urged the authorities to sustain reform momentum and prudent debt management, while pressing for prompt adjustments to safeguard fiscal and external stability. They underscored the need to rationalise spending, advance delayed fuel subsidy reforms by 2028 with social protection measures, and intensify efforts in non-oil revenue mobilisation.
On monetary policy, the Board emphasised avoiding premature easing to sustain disinflation, while allowing the exchange rate to act as a key shock absorber. Directors also called for stronger financial sector oversight, reforms in public financial management, and continued improvements in governance and the business climate to boost non-oil growth.
The IMF further encouraged Angola to smoothen debt repayments by prioritising low-cost financing options and cautioned against heavy reliance on short-term borrowing.
