Several years of high inflation rates have negatively affected economic conditions in Angola. Macroeconomic stabilization in Angola entails strict control over central bank credit to the government, an ending of the quasi-fiscal expenditures, and a reduction of the national bank of Angola’s deficit. Reserve adequacy is an important factor for stable economic development and management. This note reviews some of the main challenges faced by Angola's policymakers in launching a credible subsidy reform, and also reviews the sources and uses of state oil revenue in Angola.
This 2004 Article IV Consultation highlights that Angola’s GDP grew by 11 percent in 2004, following a slowdown in growth in 2003, largely reflecting the profile of oil production, which now accounts for one-half of GDP. The economy outside the extractive sector is currently estimated to be growing by about 9 percent. Despite extensive landmines and devastated infrastructure, agricultural production has recently begun to recover. Progress on structural reform and the implementation of policies to deal systematically with poverty reduction has been limited. The state continues to exercise a heavy influence in many sectors.
Austria’s 2004 Article IV Consultation reports that the economy has continued to perform relatively well, unemployment is among the lowest in the European Union, and competitiveness remains strong. Also, a gradual recovery is under way and short-term economic prospects are positive, although risks remain. There are areas of potential risk stemming primarily from exposure of Austrian banks in central and eastern European countries and foreign currency loans to households; and there is scope for strengthening supervision and reviewing the current deposit insurance system over the medium term.