Angola: Activity falls at slower pace in the third quarter
GDP contracted at a slower rate of 5.8% year-on-year in the third quarter, above the 8.3% contraction logged in the second quarter.
Sector-level data revealed that the improvement came on the back of a softer drop in the key oil sector, which accounts for roughly one third of GDP, as output fell 5.1% year-on-year (Q2: -8.2% yoy). That said, Q3 marked the 18th consecutive quarter of contracting activity in the sector. Moreover, output in the fishing sector also declined at a reduced rate. Meanwhile, activity in the manufacturing sector swung from contraction to expansion and output growth in the agricultural sector accelerated. That said, activity in the extractive and construction sectors dropped at a sharper pace, weighing on the headline reading.
The economy remained in a dire situation in the final quarter of last year due to the lingering impact of the Covid-19 pandemic. However, activity is expected to recover this year, albeit marginally, from years of recession amid the reopening of the global economy and firming of international trade, which should strengthen aggregate demand. The balance of risks remains tilted to the downside, however, amid uncertainty over the strength of the global recovery as well as the rollout and availability of vaccines.