The Oxford Economics Africa consultancy said on Tuesday that the drop in inflation in Angola would lead the central bank to cut interest rates next year when inflation slows to 12.7%.
“Thanks to positive base effects, lower commodity prices and a slowdown in the growth rate of credit and monetary aggregates, we forecast that inflation will continue to fall to 12.7% at the end of next year; this lower inflation rate should support a cumulative cut of 400 basis points over the next year,” the analysts wrote.
In a comment on the evolution of inflation in Angola, which in November fell to 15.24%, the lowest in the last seven years, the analysts from the British consultancy’s African department wrote that “in contrast to most other countries, inflation has been on a downward trend for several months, mainly due to the strengthening of the local currency from the value of 12 months ago and the generalised decline of food prices since May.
The National Consumer Price Index fell in November to 15.24% year-on-year, the lowest value in almost seven years, according to data from the National Statistics Institute (INE) analysed by Lusa.
The last time year-on-year inflation was below 16% was in January 2016, when it was 15.20%.
The 15.24% represents a decrease of 11.74 percentage pointsabouto the inflation observed in the same period of the previous year and a deceleration of 1.44 percentage pointaboutto the year-on-year variation of the previous month.
In the province of Luanda, the decline was even more significant, reaching 14.6% year-on-year, the lowest since December 2015 (14.3%) and a decrease of 15.82 percentage points from that observed in the same period of the previous year.
In monthly terms, the National Consumer Price Index (NCPI) registered a change of 0.82% between October and November 2022.
“Comparing the monthly variations (October to November 2022), there is an acceleration of 0.04 percentage points, while in year-on-year terms (November 2021 to November 2022), there is a deceleration in the current variation of 1.26 percentage points,” INE points out.
Health-related items were those that registered the highest price rises, with a monthly variation of 1.84%. Also of note were rises in the following categories: Clothing and Footwear with 1.75%, Miscellaneous Goods and Services with 1.31% and Leisure, Recreation and Culture with 1.15%.
Last week, the governor of the National Bank of Angola (BNA), José de Lima Massano, said that Angola would end the year with inflation of less than 16%, predicting greater price stability in the economy by 2023.
