(MENAFN) Angola's economy encountered modest growth in 2023, with its gross domestic product (GDP) expanding by 0.9 percent despite facing challenges such as currency devaluation and inflation, as outlined in a report released by the National Bank of Angola (BNA) on Tuesday.
The BNA's Annual Report and Accounts for 2023, drawing on data from Angola's National Institute of Statistics, highlighted that the GDP dynamics were primarily influenced by a decline of 2.4 percent in the oil sector and a slowdown in the growth of the non-oil sector.
The oil extraction and refining industry, which constitutes a significant portion of Angola's GDP at 28.2 percent, experienced a downturn in 2023 due to a 3.3 percent decrease in oil production, contrasting with marginal growth observed in the preceding year.
Moreover, the deceleration in the non-oil sector growth rate was attributed to factors such as currency depreciation and reduced imports, particularly of essential commodities like food items. This imbalance between supply and demand for goods and services in the economy was underscored in the report.
The Angolan currency, the Kwanza, saw a substantial depreciation of 39.23 percent against the U.S. dollar by December 2023 compared to the corresponding period in 2022, exacerbating economic challenges.
In response to inflationary pressures stemming from currency devaluation, the BNA adjusted its monetary policy stance, maintaining interest rates unchanged from May to November 2023. This pause in monetary easing signaled a shift towards a more restrictive monetary policy approach to address inflation concerns, according to the report.
Annual inflation stood at 20.01 percent in 2023, with food and non-alcoholic beverages identified as the primary drivers of price hikes, accounting for more than half of the overall inflation rate, as outlined in the report's findings.
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