Country Report Angola
- ID: 2114010
- August 2015
- Region: Angola
- 24 Pages
- The Economist Intelligence Unit
Angola's inflation returned to double-digit levels in July, with the year-on-year rate rising to 10.19%, according to data published by the Instituto Nacional de Estatística (INE) in mid-August.
The INE reports that its Índice de Preços Grossista (wholesale price index) rose by 1.02% between June and July. The price of locally produced products rose by 2.35%, led by manufacturing and construction inputs such as tubing, as well as meat items, while imported goods saw a price rise of 0.64%, led by food and household products.
The rate-up from 9.6% in June-is the highest registered in three years. This will be a source of concern for the Angolan government, which has prioritised-and taken great pride in-reducing consumer prices from their historic war-time highs. The rate reached 241.1% in January 2001, and persistently high inflation contributed to the re-basing of the kwanza. The latest price increases come as the Banco Nacional de Angola (BNA, the central bank) is struggling to control the value of the kwanza, which has tanked against the US dollar in the past six months because of the fall in oil prices, Angola's main source of foreign exchange (and government revenue). The BNA devalued the currency by some 6% in June, and for most of August has kept the official rate steady at Kz126:US$1 by increasing sales of foreign exchange to commercial banks. However, the gap with the parallel market remains wide, with the informal-market rate hovering around Kz180:US$1.