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International Monetary Fund. African Dept.
Near-term macroeconomic prospects continue to improve in the context of higher oil prices and a gradual global recovery from the pandemic shock, but the medium-term outlook remains challenging and highly uncertain. Oil production remains muted, debt and inflation remain elevated, and non-oil activity is expected to recover only gradually. However, continued strong fiscal performance (aided by higher oil revenues), exchange rate stabilization, and a return to positive non-oil growth would contribute to a reduction in the debt-to-GDP ratio this year, easing debt vulnerabilities.
International Monetary Fund. African Dept.

1. While a gradual recovery appears to be starting, the impact of last year’s strong COVID-related shocks is still being felt on the economic, health, and social fronts. Following four years of recession, the COVID-19 shock resulted in a large output contraction in 2020, severely pressured external balances, and further reduced Angolans’ average incomes, in a context of already high poverty levels. Pressures have begun to ease somewhat amid higher global oil prices and contained levels of COVID infections, but the nascent recovery will likely remain partial this year.

International Monetary Fund. African Dept.

IMF Country Report No. 21/140

International Monetary Fund. African Dept.
Near-term macroeconomic prospects continue to improve in the context of higher oil prices and a gradual global recovery from the pandemic shock, but the medium-term outlook remains challenging and highly uncertain. Oil production remains muted, debt and inflation remain elevated, and non-oil activity is expected to recover only gradually. However, continued strong fiscal performance (aided by higher oil revenues), exchange rate stabilization, and a return to positive non-oil growth would contribute to a reduction in the debt-to-GDP ratio this year, easing debt vulnerabilities.
International Monetary Fund. African Dept.

Following a sharp 4 percentage point decline in real GDP growth in 2015, in the wake of the 2014 oil price shock, the Angolan economy went into recession in 2016 and remained there for five years. The authorities launched a wide-ranging reform program to stabilize and diversify the economy, and requested a Fund EFF arrangement in 2018 to support the reform effort. While a slow recovery seemed imminent at the end of 2019, this was interrupted by COVID-19 and a deep recession in 2020. The non-oil economy is however recovering, having assumed a sustained upward trajectory in real GDP growth through 2019, that was interrupted with a 5.2 percent contraction in 2020, before resuming again in 2021.

International Monetary Fund. Strategy, Policy, & Review Department
The Debt Limits Policy (DLP) establishes the framework for using quantitative conditionality to address debt vulnerabilities in IMF-supported programs. In October 2020, the Executive Board approved reforms to the DLP which will enter into effect on June 30, 2021. The risk-based approach to setting debt conditionality informed by Debt Sustainability Analyses under the previous DLP approved in 2014 is maintained. The reforms aim to provide countries with more financing flexibility in practice while still adequately containing debt vulnerabilities through appropriate safeguards. This note provides operational and technical guidance related to the implementation of the DLP, including the operationalization of the approved reforms. In particular, it outlines the core principles underpinning the DLP, including when debt conditionality in IMF-supported programs is warranted and how to account for country-specific circumstances in the design of debt limits. The note also describes the process of setting and implementing debt conditionality, including: (i) identifying debt vulnerabilities to inform the focus of debt conditionality; (ii) designing debt conditionality; and (iii) implementing debt conditionality through the review cycle. The Guidance Note is intended for use by both IMF staff and country officials. In this regard, in addition to the guidance presented in the main body, the note also contains several annexes that cover definitional, technical, and operational issues arising in the determination and implementation of public debt limits.
International Monetary Fund. African Dept.

Fourth Review Under the Extended Arrangement Under the Extended Fund Facility and Requests for Modifications of Performance Criteria and Waivers for Performance