Economy loses steam in the second quarter

Growth slows from Q1’s nine-year high: The economy lost momentum in the second quarter, growing 4.1% year on year but falling short of the first quarter’s nine-year high of 4.6%. On a seasonally adjusted quarter-on-quarter basis, economic activity was flat in Q2, deteriorating from the previous period's 2.1% expansion and marking the worst reading since Q1 2023.

Hydrocarbons sector runs out of gas in Q2: Oil sector growth more than halved to 2.6% year on year in the second quarter from 6.9% in Q1, driving the overall slowdown. In particular, oil production growth slowed to a crawl, increasing 1.1% in the quarter (Q1: +13.4% yoy). More positively, non-oil output rose at a near three-year high pace of 4.7% year on year (Q1: +3.9% yoy). An over 60% surge in mining output and faster growth in manufacturing activity spearheaded the upturn. A faster increase in agricultural sector output added momentum. That said, the services sector dragged on growth, as contracting transport sector activity plus a softer rise in wholesale and retail trade outweighed improvements in the real estate and public administration sectors.

Economy to head into a rougher patch in H2: The economy is forecast to run out of fuel in H2, as a tighter monetary backdrop, elevated inflation and a weaker kwanza in annual terms strangle domestic demand. Moreover, a higher base of comparison will dent oil production. That said, our panelists expect GDP growth to more than double in 2024 from 2023 due to a strong performance in H1 and to remain largely steady in 2025. Higher-for-longer interest rates are a key downside risk.

Panelist insight: Oxford Economics’ Gerrit van Rooyen commented: “Our growth projection for 2024 partly reflects a bounce-back in oil production following the completion of extensive maintenance in Q1 2023. Non-oil GDP will still be supported by investment in oil refining, mining exploration, transport infrastructure, renewable energy, and the extension of the privatisation programme to a second round (2023-2026).”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Angolan GDP projections for the next ten years from a panel of 16 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Angolan GDP.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Angolan GDP projections.

Want to get access to the full dataset of Angolan GDP forecasts? Send an email to info@focus-economics.com.