Economic activity and social conditions have been adversely affected by the intensification of the civil war. The goal is to restore domestic and external equilibrium and create the conditions for sustained growth, especially by boosting the growth of the non-oil sectors, lowering inflation to single-digit rates, improving the efficiency and transparency of public sector operations, and enhancing the role of the private sector. In March 1999, the government launched an adjustment and reform program. The authorities have made adjustments in fuel prices and electricity tariffs.
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
This Selected Issues paper and Statistical Appendix on Angola underlie monetary policy framework. Angola has adopted an anti-inflation policy that has led to a sharp decline in inflation. To institute a monetary policy framework, a nominal anchor or constraint on the value of domestic currency must be established. Additional work to fine-tune the measures of currency in circulation, conduct more sophisticated tests to assess the relationship between inflation and the monetary aggregates, and determine how to incorporate the currency measure in monetary operations is needed.
This paper discusses a request from Angola for a Stand-By-Arrangement (SBA). The requested SBA aims to support orderly policy adjustments to restore macroeconomic balances and rebuild international reserves. This program also includes a focused reform agenda aimed at medium-term structural issues on which long-term non-oil sector growth will ultimately depend. IMF staff and the authorities have agreed that, while the policy mix should consider all possible instruments geared toward achieving these objectives, fiscal policy should play the lead role in the policy package.