Executive Summary.. 5
Core Views...5
Major Forecast Changes.....5
Key Risks To Outlook.....5
Chapter 1: Political Outlook. 7
SWOT Analysis....7
BMI Political Risk Ratings..7
Domestic Politics .. 8
Challenges For Ruling Party Beyond 2012 Election....8
The outcome of Angolas 2012 parliamentary election is seemingly inevitable, with recent constitutional changes and a fragmented
opposition setting the stage for a sweeping victory for the ruling Movimento Popular de Libertação de Angola party. However, we note
that challenges exist beyond the election, particularly due to a possible transfer of presidency and muted but growing instances of
popular discontent.
TABLE: ANGOLA POLITICAL OVERVIEW..... 8
Long-Term Political Outlook... 10
An Uncertain Path To Maturity.....10
Although Angola has become one of the largest and fastest-growing economies in Sub-Saharan Africa, its transition over the past
decade has not been complemented by a move towards a more open political system. The growing centralisation of power, both political
and economic, presents the key risk to stability over the coming decade.
Scenarios For Change..11
Chapter 2: Economic Outlook.... 13
SWOT Analysis..13
BMI Economic Risk Ratings.....13
Economic Activity ... 14
All Set For A Return To Double-Digit Growth.14
Owing to a number of giant oil projects coming online and continued investment into the countrys infrastructure, Angola is set to
become one the worlds fastest growing economies in 2012. We are forecasting real GDP expansion of 12.8% in 2012 and 10.3% in
2013, as the country returns to double-digit growth for the first time since 2008.
TABLE: ECONOMIC ACTIVITY.. 14
Balance Of Payments ..... 16
Oil And Diamond Exports Boost Current Account Position.16
We are forecasting Angolas large current account surplus to continue expanding to 19.6% of GDP in 2012, from 18.5% in 2011, before
moderating but remaining solid at 10.6% in 2013. The impressive numbers are driven by very strong oil export expectations, but we also
expect the countrys diamond exports to record considerable growth.
TABLE: CURRENT ACCOUNT ... 16
Fiscal Policy .... 17
Poised For Fiscal Surplus In 2012...17
We are forecasting Angolas fiscal surplus to widen to 3.7% of GDP in 2012, from 2.1% in 2011, before moderating to 1.9% in 2013.
Given that 2012 is an election year, we believe that total expenditure will grow considerably, but this will be outstripped by the vast
increase in oil revenues.
TABLE: FISCAL POLICY.... 17
Monetary Policy ... 19
Rates To Stay On Hold In Q112....19
The monetary policy committee of the Banco Nacional de Angola decided to keep the benchmark rate at 10.5% at its second meeting
on November 29 2011. With inflation falling below target in October and an outlook for lower food prices over the coming months, we
believe the rate will be held at 10.5% throughout the first quarter of 2012.
TABLE: MONETARY POLICY.... 19
Business Monitor International Ltd www.businessmonitor.com 3
Contents
Chapter 3: 10-Year Forecast.. 21
The Angolan Economy To 2021.. 21
Economic Diversification Vital For Long-Term Growth ....21
Real GDP growth in Angola is set to decline in tandem with a slowdown of oil production growth. We expect annual economic expansion
to average 10.6% over 2012-2016, followed by a much slower 4.9% over 2017-2020. Economic diversification will be vital for the
maintenance of a healthy economic trajectory.
TABLE: LONG-TERM MACROECONOMIC FORECASTS .... 21
Chapter 4: Business Environment. 23
SWOT Analysis..23
BMI Business Environment Risk Ratings...23
Business Environment Outlook.. 24
Introduction ..24
Institutions ....24
TABLE: BMI Business And Operation Risk Ratings... 24
TABLE: BMI Legal Framework Rating... 25
Infrastructure ....26
TABLE: Labour Force Quality..... 26
TABLE: Africa – Annual FDI Inflows.. 27
TABLE: TRADE AND INVESTMENT RATINGS..... 28
TABLE: Top Export Destinations.... 29
Operational Risk ...30
Chapter 5: BMI Global Assumptions. 31
Global Assumptions.... 31
Eurozone Break-Up Risks Rising ...31
TABLE: GLOBAL ASSUMPTIONS ..... 31
TABLE: DEVELOPE D STATES REAL GDP GROWTH FORECAST .... 32
TABLE: REAL GDP GROWTH CONSENSUS FORECASTS .... 32
TABLE: EMERGING MARKETS REAL GDP GROWTH FORECAST ... 33