Capital Economics analyst tracking Angola predicts 3% growth this year, but warns of a return to rates below 1.5% by 2024, with oil hindering the economy's expansion.

"We anticipate growth of 3% this year, then 0.7% in 2021, and expect the debt-to-GDP ratio to improve to 52% by year-end due to higher nominal GDP, a stronger currency and a large primary fiscal surplus, but it won't be long before Angola returns to a low growth trajectory," between 0.5% and 1.5% between 2023 and 2024, Virág Fórizs warned.

Speaking to Lusa following the Angolan elections on Wednesday, the analyst who follows the Angolan economy predicted that João Lourenço's second term will be marked by continued diversification efforts and the privatization program, but warned: "We think that progress will probably continue to be marginal and the economy will remain dependent on the energy sector; the main point is that the recent robustness of this industry will fade and it will once again become a 'deadweight' in economic growth."

Moreover, he continued, "oil prices are likely to fall in 2023 and 2024 and Angolan oil production will continue to decline, as reversal of under-investment in the industry is unlikely, especially as the world moves increasingly away from fossil fuels, which should also create difficulties for increased gas production."

For Capital Economics, the persistent problems in the oil sector, as well as the desire to keep the economic environment attractive to investors, "will probably prevent policymakers from opening the purse strings too much, which should lead to only a slight increase in public spending in the coming years."

The bleak outlook for the economy in the coming years does not, however, prevent Virág Fórizs from recognizing the country's economic successes in the recent past: "On the economic side, Angola has made substantial progress towards the recovery of macroeconomic stability, particularly when it comes to fiscal and monetary policies," the analyst pointed out, recalling the economic adjustment program with the International Monetary Fund (IMF) and the liberalization of the exchange rate, which recovered from the heavy losses at the end of the past decade, at around 65%, to finally be at a point of equilibrium against the dollar.

"Assuming no violence [following the elections] and the re-election of João Lourenço, we think the economy will continue 'in the clouds' due to oil for a few more quarters, but then return to a low growth trajectory," the analyst concluded.

The Popular Movement for the Liberation of Angola (MPLA) won Angola's general elections with 51.07%, followed by the National Union for the Total Independence of Angola (UNITA) with 44.05% of the votes, Angola's National Electoral Commission (CNE) disclosed, when 97.3% of polling stations were scrutinized.

The provisional results were released on Thursday by CNE spokesman Lucas Quilundo, at a time when 97.3% polling stations were scrutinized, so there should be no substantial changes, he said.

According to these data, the MPLA elects 124 deputies and UNITA gets 90 parliamentary seats.

The historical National Front for the Liberation of Angola (FNLA), the Social Renewal Party (PRS) and the newcomer Humanist Party of Angola (PHA), the only one led by a woman (Bela Malaquias), elect two deputies each, and the Broad National Salvation Convergence - Electoral Coalition (CASA-CE) no longer has parliamentary representation, losing the 16 seats it had.

The abstention, according to Lucas Quilundo, was above 54%.