LUANDA (Reuters) – The Angolan economy is set to grow 1.1 percent this year as sub-Saharan Africa’s third largest economy enjoys a mild recovery, the International Monetary Fund said on Wednesday following a 10-day visit to the country. But Ricardo Velloso, the Brazilian economist who led the visit, said macroeconomic imbalances remain that need to be tackled by the new government.
In a statement, he highlighted the wide spread between the parallel and official market exchange rates and a backlog of foreign exchange purchase requests in commercial banks as points of continuing concern.
Velloso said the team met members of the new government which it felt understood the challenges facing the economy, and gave a thumbs up to the administration’s six-month economic plan known as “Plano Intercalar.”
“The Plano Intercalar is adequately focused on the goals of stepping up fiscal consolidation efforts, introducing greater exchange rate flexibility, and improving governance and the business climate to promote faster and inclusive growth as well as economic diversification,” the statement said.
After nearly a decade of rapid growth, Angola slipped into recession last year as a fall in the price of oil led to a massive drop in government revenue and access to hard currency.
The official unemployment rate is at 25 percent, though likely in reality much higher, and a dollar fetches more than double the official rate on the black market.
President Joao Lourenco, who took office in September, has vowed to get the economy back on track promising to diversify away from oil and combat corruption.
Reporting by Stephen Eisenhammer, Editing by William Maclean