Angola Fixed Investment (ann. var. %)

Investment in Angola

GDP grows at softest pace since Q1 2022 in Q4

GDP growth moderated to 2.6% year on year in the fourth quarter, from 3.9% in the third quarter. Q4’s reading marked the worst result since Q1. For the year as a whole, the economy posted a 3.0% expansion, up from 2021’s 1.2%.

The all-important oil sector contracted by 5.0% in Q4, contrasting Q3’s 2.7% expansion. Oil output lost steam at the tail end of 2022, likely due to capacity constraints: Earlier in the year, the country ramped up production above sustainable capacity to benefit from elevated global oil prices.

Meanwhile, growth in the non-oil sector accelerated to 5.2% in Q4 from 4.4% in Q3. Output in manufacturing, construction and trade grew at a sharper rate. That said, agricultural output expanded at a softer clip.

On a seasonally-adjusted quarter-on-quarter basis, economic growth lost steam, cooling to 0.2% in Q4, from the previous period’s 0.8% increase.

Turning to this year, economic growth is forecast to decelerate. The non-oil sector is seen expanding at a similar pace: Domestic activity will benefit from lower inflation and interest rates. That said, a weaker external sector due to global headwinds will roughly offset internal dynamism. Meanwhile, the oil sector will swing to contraction, as crude output declines due to maintenance work and maturing fields.