IMF Lowers Angola’s Economic Growth Forecast: What Investors and Business Owners Need to Know About Rising Debt Risks
LUANDA/NEW YORK – The International Monetary Fund (IMF) has revised Angola’s economic growth forecast for 2025 down to 2.1% from the previous 2.4%, citing weaker oil exports as a primary factor. The IMF also warned of rising risks in Angola’s debt management.
The Fund emphasized the need for Angola to limit borrowing, reduce public expenditure, and adopt greater flexibility in its foreign exchange policy to stabilise the economy. This adjustment follows an earlier growth downgrade from 3% to 2.4% after the IMF’s May staff assessment mission to Luanda.
“Angola has been affected by volatility in oil prices and sovereign spreads, with production shortfalls in the first half of 2025 intensifying these shocks,” the IMF stated.
While Angola’s debt repayment capacity remains “adequate,” the IMF cautioned against excessive domestic borrowing and reliance on costly short-term external debt. It noted that heavy domestic borrowing risks increasing banks’ exposure to sovereign risk, and short-term external debt could raise servicing costs, undermine investor confidence, and restrict access to favourable market financing.
Earlier this year, Angola had to provide an additional $200 million in collateral to JPMorgan after the value of a bond securing a loan dropped, though the funds were recovered once the bond rebounded.
The IMF highlighted further challenges for Angola, including potential declines in crude oil prices, tightening external financing conditions, and the necessity to reduce oil-backed loans from China to ease fiscal pressures.
As an oil-exporting nation, Angola has been impacted by global market volatility and trade disruptions, such as US tariffs imposed earlier this year. The IMF underlined that careful fiscal management and structural reforms are essential to sustain economic growth and maintain investor confidence. — Reuters
Special Analysis by Omanet | Navigate Oman’s Market
Angola’s downgraded growth forecast and rising debt risks highlight the vulnerability of oil-dependent economies to global price volatility and fiscal imbalances. For businesses in Oman, this signals the importance of diversifying investments beyond oil and strengthening financial resilience. Smart investors should closely monitor fiscal reforms and debt management strategies in similar markets to anticipate potential ripple effects on regional economic stability and investment opportunities.
