Abstract
The Angolan government’s efforts to achieve macroeconomic stability to bring inflation and fiscal deficit considerably down are paying off despite high vulnerability to oil revenue shocks. The expected overall growth of up to 7 percent will be contributed to by increased oil production, multiple public investment programs, tax administration reforms, and inflation control. Concentrating on a medium-term fiscal framework, structural transformation and diversification are expected to reinforce the economy. The Executive Board, which welcomed the Stand-By-Arrangement and Financial Sector Assessment Program (FSAP), suggested removing exchange restrictions.
Debt Sustainability Analysis
1. Angola’s external debt position appears sustainable. Under the baseline, external debt increases moderately from 20 percent of GDP in 2011 to 23 percent in 2017. Of the DSA’s various standard shocks, the most damaging is a current account shock (proxy for a decline in oil exports). This shock posits that the current account balance is ½ standard deviation below the baseline, which could be a major shock given the recent volatility. Under that scenario the external-debt-to-GDP ratio would increase to 46 percent by 2017. Interest rate, output and depreciation shocks have less pronounced effects.
2. Some caveats are in order on the data underlying the external DSA. The Angolan authorities so far do not have private sector debt statistics, and thus the analysis is based solely on public sector external debt. The authorities have stepped up efforts to gather information on external private sector debt. The debts of state-owned enterprises (SOEs) are however included: Sonangol is a large external borrower. The central government has difficulty in curtailing the acquisition of debt by SOEs, which is expected to exceed central government debt issuance in the period up to 2017.
3. Angola’s public debt position (covering general government and major SOE external debt) appears sustainable. Under the baseline scenario that foresees a gradual increase in public investment spending, the ratio of government debt to GDP remains at moderate levels over the horizon, increasing to 37 percent of GDP by 2017. However, domestic debt of SOEs is not currently captured by the debt statistics.
4. A scenario derived from Angola’s 2008-2011 performance highlights the vulnerable debt dynamics. A ½ standard deviation lower growth shock would result in a debt rising to 58 percent of GDP by 2017. Similarly, a primary balance shock would raise debt to 57 percent of GDP, and a shock to interest rates to 49 percent of GDP. Lastly, a combined interest rate and growth shock would raise debt to 56 percent of GDP. These results suggest that Angola’s public debt dynamics are highly sensitive to macroeconomic shocks.
5. The authorities consider the domestic debt maturity profile as an important source of risk. In their view, exchange rate risk is mitigated by the large foreign currency denominated revenue flows (i.e., oil), and interest rate risk is limited by favorable external borrowing conditions and excess liquidity in domestic banks. But a rollover risk may arise because about 30 percent of domestic public debt is of a short term nature (by contrast less than 1 percent of external public debt is short term). The authorities aim to gradually extend the average maturity of domestic debt, balancing the tradeoff with interest costs.
Angola: External Debt Sustainability Framework, 2007-2017
(In percent of GDP, unless otherwise indicated)
Derived as [r − g − ρ(1+g) + εα(1+r)]/(1+g+ρ+gρ) times previous period debt stock, with r = nominal effective interest rate on external debt; ρ = change in domestic GDP deflator in US dollar terms, g = real GDP growth rate, ε = nominal appreciation (increase in dollar value of domestic currency), and ? = share of domestic-currency denominated debt in total external debt.
The contribution from price and exchange rate changes is defined as [-ρ(1+g)+εα(1+r)]/(1+g+ρ+gρ) times previous period debt stock. ρ increases with an appreciating domestic currency (ε>0) and rising inflation (based on GDP deflator).
For projection, line includes the impact of price and exchange rate changes.
Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.
Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GDP growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels of the last projection year.
Angola: External Debt Sustainability Framework, 2007-2017
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Debt-stabilizing non-interest current account 6/ |
||||
| Baseline: External debt | 16.4 | 16.6 | 20.1 | 21.7 | 19.7 | 19.5 | 20.4 | 21.0 | 21.6 | 22.5 | 22.7 | −2.5 | |||
| Change in external debt | −2.3 | 0.2 | 3.5 | 1.5 | −2.0 | −0.2 | 1.0 | 0.5 | 0.6 | 0.9 | 0.3 | ||||
| Identified external debt-creating flows (4+8+9) | −22.7 | −13.9 | 8.9 | −5.2 | −10.3 | −5.9 | −5.8 | −4.3 | −3.0 | −1.0 | 0.2 | ||||
| Current account deficit, excluding interest payments | −20.8 | −10.9 | 9.4 | −9.5 | −10.1 | −8.0 | −5.0 | −3.4 | −1.3 | 0.8 | 2.3 | ||||
| Deficit in balance of goods and services | −32.9 | −26.9 | 0.3 | −19.5 | −21.7 | −17.9 | −14.0 | −11.8 | −9.3 | −6.8 | −4.9 | ||||
| Exports | 76.4 | 78.1 | 55.1 | 62.4 | 65.0 | 60.1 | 55.0 | 52.1 | 49.3 | 46.7 | 44.7 | ||||
| Imports | 43.5 | 51.2 | 55.4 | 42.9 | 43.3 | 42.2 | 40.9 | 40.3 | 40.0 | 39.9 | 39.8 | ||||
| Net non-debt creating capital inflows (negative) | 3.0 | 1.1 | −2.9 | 5.5 | 3.8 | 2.7 | −0.5 | −0.7 | −1.4 | −1.5 | −1.8 | ||||
| Automatic debt dynamics 1/ | −4.9 | −4.0 | 2.4 | −1.2 | −4.0 | −0.6 | −0.3 | −0.3 | −0.3 | −0.3 | −0.3 | ||||
| Contribution from nominal interest rate | 0.9 | 0.6 | 0.5 | 0.5 | 0.5 | 0.6 | 0.7 | 0.7 | 0.7 | 0.8 | 0.8 | ||||
| Contribution from real GDP growth | −2.9 | −1.6 | −0.4 | −0.6 | −0.7 | −1.2 | −0.9 | −1.0 | −1.0 | −1.1 | −1.1 | ||||
| Contribution from price and exchange rate changes 2/ | −2.9 | −3.0 | 2.4 | −1.1 | −3.9 | … | … | … | … | … | … | ||||
| Residual, incl. change in gross foreign assets (2-3) 3/ | 20.4 | 14.1 | −5.3 | 6.7 | 8.3 | 5.7 | 6.8 | 4.9 | 3.7 | 1.8 | 0.0 | ||||
| External debt-to-exports ratio (in percent) | 21.5 | 21.3 | 36.6 | 34.7 | 30.2 | 32.4 | 37.2 | 40.2 | 43.9 | 48.2 | 50.9 | ||||
| Gross external financing need (in billions of US dollars)4/ | −7.7 | −6.7 | 11.2 | −4.4 | −6.6 | −3.4 | −0.3 | 2.4 | 5.2 | 8.7 | 12.1 | ||||
| in percent of GDP | −12.7 | −7.9 | 14.8 | −5.4 | −6.4 | −3.1 | −0.2 | 2.0 | 3.9 | 6.0 | 7.9 | ||||
| Scenario with key variables at their historical averages 5/ | 19.5 | 20.1 | 18.6 | 16.3 | 12.7 | 8.2 | 1.0 | ||||||||
| Key Macroeconomic Assumptions Underlying Baseline | |||||||||||||||
| Real GDP growth (in percent) | 22.6 | 13.8 | 2.4 | 3.4 | 3.9 | 6.8 | 5.0 | 5.1 | 5.3 | 5.2 | 5.3 | ||||
| GDP deflator in US dollars (change in percent) | 18.0 | 22.3 | −12.4 | 5.6 | 21.7 | 1.2 | −0.3 | 0.8 | 2.0 | 1.5 | 1.7 | ||||
| Nominal external interest rate (in percent) | 6.7 | 5.1 | 2.7 | 2.6 | 2.9 | 3.4 | 3.5 | 3.7 | 3.8 | 3.8 | 3.7 | ||||
| Growth of exports (US dollar terms, in percent) | 38.4 | 42.4 | −36.8 | 23.8 | 31.6 | 0.0 | −4.2 | 0.5 | 1.6 | 1.0 | 2.6 | ||||
| Growth of imports (US dollar terms, in percent) | 61.5 | 63.9 | −3.0 | −15.3 | 27.5 | 5.3 | 1.6 | 4.3 | 6.7 | 6.4 | 6.8 | ||||
| Current account balance, excluding interest payments | 20.8 | 10.9 | −9.4 | 9.5 | 10.1 | 8.0 | 5.0 | 3.4 | 1.3 | −0.8 | −2.3 | ||||
| Net non-debt creating capital inflows | −3.0 | −1.1 | 2.9 | −5.5 | −3.8 | −2.7 | 0.5 | 0.7 | 1.4 | 1.5 | 1.8 | ||||
Derived as [r − g − ρ(1+g) + εα(1+r)]/(1+g+ρ+gρ) times previous period debt stock, with r = nominal effective interest rate on external debt; ρ = change in domestic GDP deflator in US dollar terms, g = real GDP growth rate, ε = nominal appreciation (increase in dollar value of domestic currency), and ? = share of domestic-currency denominated debt in total external debt.
The contribution from price and exchange rate changes is defined as [-ρ(1+g)+εα(1+r)]/(1+g+ρ+gρ) times previous period debt stock. ρ increases with an appreciating domestic currency (ε>0) and rising inflation (based on GDP deflator).
For projection, line includes the impact of price and exchange rate changes.
Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.
Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GDP growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels of the last projection year.
Angola: External Debt Sustainability Framework, 2007-2017
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Debt-stabilizing non-interest current account 6/ |
||||
| Baseline: External debt | 16.4 | 16.6 | 20.1 | 21.7 | 19.7 | 19.5 | 20.4 | 21.0 | 21.6 | 22.5 | 22.7 | −2.5 | |||
| Change in external debt | −2.3 | 0.2 | 3.5 | 1.5 | −2.0 | −0.2 | 1.0 | 0.5 | 0.6 | 0.9 | 0.3 | ||||
| Identified external debt-creating flows (4+8+9) | −22.7 | −13.9 | 8.9 | −5.2 | −10.3 | −5.9 | −5.8 | −4.3 | −3.0 | −1.0 | 0.2 | ||||
| Current account deficit, excluding interest payments | −20.8 | −10.9 | 9.4 | −9.5 | −10.1 | −8.0 | −5.0 | −3.4 | −1.3 | 0.8 | 2.3 | ||||
| Deficit in balance of goods and services | −32.9 | −26.9 | 0.3 | −19.5 | −21.7 | −17.9 | −14.0 | −11.8 | −9.3 | −6.8 | −4.9 | ||||
| Exports | 76.4 | 78.1 | 55.1 | 62.4 | 65.0 | 60.1 | 55.0 | 52.1 | 49.3 | 46.7 | 44.7 | ||||
| Imports | 43.5 | 51.2 | 55.4 | 42.9 | 43.3 | 42.2 | 40.9 | 40.3 | 40.0 | 39.9 | 39.8 | ||||
| Net non-debt creating capital inflows (negative) | 3.0 | 1.1 | −2.9 | 5.5 | 3.8 | 2.7 | −0.5 | −0.7 | −1.4 | −1.5 | −1.8 | ||||
| Automatic debt dynamics 1/ | −4.9 | −4.0 | 2.4 | −1.2 | −4.0 | −0.6 | −0.3 | −0.3 | −0.3 | −0.3 | −0.3 | ||||
| Contribution from nominal interest rate | 0.9 | 0.6 | 0.5 | 0.5 | 0.5 | 0.6 | 0.7 | 0.7 | 0.7 | 0.8 | 0.8 | ||||
| Contribution from real GDP growth | −2.9 | −1.6 | −0.4 | −0.6 | −0.7 | −1.2 | −0.9 | −1.0 | −1.0 | −1.1 | −1.1 | ||||
| Contribution from price and exchange rate changes 2/ | −2.9 | −3.0 | 2.4 | −1.1 | −3.9 | … | … | … | … | … | … | ||||
| Residual, incl. change in gross foreign assets (2-3) 3/ | 20.4 | 14.1 | −5.3 | 6.7 | 8.3 | 5.7 | 6.8 | 4.9 | 3.7 | 1.8 | 0.0 | ||||
| External debt-to-exports ratio (in percent) | 21.5 | 21.3 | 36.6 | 34.7 | 30.2 | 32.4 | 37.2 | 40.2 | 43.9 | 48.2 | 50.9 | ||||
| Gross external financing need (in billions of US dollars)4/ | −7.7 | −6.7 | 11.2 | −4.4 | −6.6 | −3.4 | −0.3 | 2.4 | 5.2 | 8.7 | 12.1 | ||||
| in percent of GDP | −12.7 | −7.9 | 14.8 | −5.4 | −6.4 | −3.1 | −0.2 | 2.0 | 3.9 | 6.0 | 7.9 | ||||
| Scenario with key variables at their historical averages 5/ | 19.5 | 20.1 | 18.6 | 16.3 | 12.7 | 8.2 | 1.0 | ||||||||
| Key Macroeconomic Assumptions Underlying Baseline | |||||||||||||||
| Real GDP growth (in percent) | 22.6 | 13.8 | 2.4 | 3.4 | 3.9 | 6.8 | 5.0 | 5.1 | 5.3 | 5.2 | 5.3 | ||||
| GDP deflator in US dollars (change in percent) | 18.0 | 22.3 | −12.4 | 5.6 | 21.7 | 1.2 | −0.3 | 0.8 | 2.0 | 1.5 | 1.7 | ||||
| Nominal external interest rate (in percent) | 6.7 | 5.1 | 2.7 | 2.6 | 2.9 | 3.4 | 3.5 | 3.7 | 3.8 | 3.8 | 3.7 | ||||
| Growth of exports (US dollar terms, in percent) | 38.4 | 42.4 | −36.8 | 23.8 | 31.6 | 0.0 | −4.2 | 0.5 | 1.6 | 1.0 | 2.6 | ||||
| Growth of imports (US dollar terms, in percent) | 61.5 | 63.9 | −3.0 | −15.3 | 27.5 | 5.3 | 1.6 | 4.3 | 6.7 | 6.4 | 6.8 | ||||
| Current account balance, excluding interest payments | 20.8 | 10.9 | −9.4 | 9.5 | 10.1 | 8.0 | 5.0 | 3.4 | 1.3 | −0.8 | −2.3 | ||||
| Net non-debt creating capital inflows | −3.0 | −1.1 | 2.9 | −5.5 | −3.8 | −2.7 | 0.5 | 0.7 | 1.4 | 1.5 | 1.8 | ||||
Derived as [r − g − ρ(1+g) + εα(1+r)]/(1+g+ρ+gρ) times previous period debt stock, with r = nominal effective interest rate on external debt; ρ = change in domestic GDP deflator in US dollar terms, g = real GDP growth rate, ε = nominal appreciation (increase in dollar value of domestic currency), and ? = share of domestic-currency denominated debt in total external debt.
The contribution from price and exchange rate changes is defined as [-ρ(1+g)+εα(1+r)]/(1+g+ρ+gρ) times previous period debt stock. ρ increases with an appreciating domestic currency (ε>0) and rising inflation (based on GDP deflator).
For projection, line includes the impact of price and exchange rate changes.
Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.
Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GDP growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels of the last projection year.
Angola: External Debt Sustainability: Bound Tests 1/ 2/
(External debt in percent of GDP)
Citation: IMF Staff Country Reports 2012, 215; 10.5089/9781475506662.002.A002
Sources: International Monetary Fund, Country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Four-year historical average for the variable is also shown.2/ For historical scenarios, the historical averages are calculated over the four-year period, and the information is used to project debt dynamics five years ahead.3/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and current account balance.4/ One-time real depreciation of 30 percent occurs in 2010.Angola: Public Sector Debt Sustainability Framework, 2007-2017
(In percent of GDP, unless otherwise indicated)
Gross debt. Coverage: general government plus major SOEs (Sonangol and TAAG).
Derived as [(r − π(1+g) − g + αε(1+r)]/(1+g+π+gπ)) times previous period debt ratio, with r = interest rate; π = growth rate of GDP deflator; g = real GDP growth rate; α = share of foreign-currency denominated debt; and ε = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r − π (1+g) and the real growth contribution as −g.
The exchange rate contribution is derived from the numerator in footnote 2/ as αε(1+r).
For projections, this line includes exchange rate changes.
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP.
Derived as nominal interest expenditure divided by previous period debt stock.
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Angola: Public Sector Debt Sustainability Framework, 2007-2017
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Debt-stabilizing primary balance 9/ | ||||
| Baseline: Public sector debt 1/ | 21.4 | 31.6 | 36.4 | 37.6 | 31.5 | 28.5 | 30.6 | 32.1 | 33.9 | 35.8 | 36.9 | −0.8 | |||
| o/w foreign-currency denominated | 19.4 | 20.7 | 25.0 | 25.6 | 22.7 | 22.1 | 22.5 | 23.2 | 24.1 | 25.1 | 25.6 | ||||
| Change in public sector debt | −0.2 | 10.2 | 4.8 | 1.2 | −6.2 | −3.0 | 2.2 | 1.5 | 1.8 | 1.9 | 1.1 | ||||
| Identified debt-creating flows (4+7+12) | −11.6 | −1.2 | 13.3 | −12.5 | −18.1 | −9.4 | −3.8 | −3.3 | −2.7 | −0.5 | −0.4 | ||||
| Primary deficit | −5.6 | 3.6 | 6.4 | −6.4 | −11.3 | −7.4 | −3.1 | −2.3 | −1.6 | 0.4 | 0.7 | ||||
| Revenue and grants | 45.8 | 50.9 | 34.6 | 43.5 | 48.8 | 44.9 | 41.3 | 40.6 | 39.9 | 38.5 | 38.8 | ||||
| Primary (noninterest) expenditure | 40.2 | 54.6 | 41.0 | 37.1 | 37.5 | 37.5 | 38.2 | 38.2 | 38.3 | 38.9 | 39.6 | ||||
| Automatic debt dynamics 2/ | −5.9 | −4.8 | 6.9 | −6.1 | −6.8 | −2.0 | −0.7 | −1.0 | −1.0 | −0.9 | −1.1 | ||||
| Contribution from interest rate/growth differential 3/ | −5.0 | −4.9 | 2.6 | −6.8 | −7.4 | −2.0 | −0.7 | −1.0 | −1.0 | −0.9 | −1.1 | ||||
| Of which contribution from real interest rate | −1.4 | −2.7 | 3.4 | −5.8 | −6.2 | 0.0 | 0.7 | 0.4 | 0.5 | 0.7 | 0.6 | ||||
| Of which contribution from real GDP growth | −3.5 | −2.2 | −0.8 | −1.0 | −1.1 | −1.9 | −1.3 | −1.4 | −1.6 | −1.6 | −1.7 | ||||
| Contribution from exchange rate depreciation 4/ | −0.9 | 0.0 | 4.3 | 0.7 | 0. | … | … | … | … | … | … | ||||
| Other identified debt-creating flows | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Privatization receipts (negative) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Residual, including asset changes (2-3) 5/ | 11.3 | 11.4 | −8.5 | 13.6 | 12.0 | 6.4 | 5.9 | 4.8 | 4.5 | 2.4 | 1.5 | ||||
| Public sector debt-to-revenue ratio 1/ | 46.7 | 62.1 | 105.5 | 86.5 | 64.5 | 63.5 | 74.2 | 79.1 | 84.9 | 93.1 | 95.1 | ||||
| Gross financing need 6/ | 6.6 | 19.2 | 27.6 | 1.4 | −7.0 | 2.0 | 5.0 | 6.7 | 7.5 | 10.0 | 10.9 | ||||
| in billions of U.S. dollars | 4.0 | 16.2 | 20.8 | 1.1 | −7.3 | 2.3 | 5.9 | 8.3 | 10.0 | 14.4 | 16.7 | ||||
| Scenario with key variables at their historical averages 7/ | 28.5 | 27.9 | 26.2 | 24.5 | 21.0 | 17.1 | −2.5 | ||||||||
| Scenario with no policy change (constant primary balance) in 2012-2017 | 28.5 | 26.3 | 22.8 | 19.0 | 13.3 | 6.8 | −0.1 | ||||||||
| Key Macroeconomic and Fiscal Assumptions Underlying Baseline | |||||||||||||||
| Real GDP growth (in percent) | 22.6 | 13.8 | 2.4 | 3.4 | 3.9 | 6.8 | 5.0 | 5.1 | 5.3 | 5.2 | 5.3 | ||||
| Average nominal interest rate on public debt (in percent) 8/ | 6.3 | 5.2 | 2.7 | 2.9 | 3.7 | 4.5 | 5.4 | 5.5 | 5.5 | 5.4 | 5.2 | ||||
| Average real interest rate (nominal rate minus change in GDP deflator, in p | −6.3 | −14.4 | 10.1 | −19.5 | −20.5 | 0.2 | 2.7 | 1.7 | 2.0 | 2.4 | 2.0 | ||||
| Nominal appreciation (increase in US dollar value of local currency, in perc | 6.9 | −0.1 | −16.0 | −3.5 | −2.8 | … | … | … | … | … | … | ||||
| Inflation rate (GDP deflator, in percent) | 12.6 | 19.7 | −7.4 | 22.4 | 24.2 | 4.3 | 2.7 | 3.8 | 3.6 | 3.0 | 3.2 | ||||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 37.4 | 54.6 | −23.0 | −6.5 | 5.1 | 6.7 | 7.0 | 5.3 | 5.4 | 6.8 | 7.1 | ||||
| Primary deficit | −5.6 | 3.6 | 6.4 | −6.4 | −11.3 | −7.4 | −3.1 | −2.3 | −1.6 | 0.4 | 0.7 | ||||
Gross debt. Coverage: general government plus major SOEs (Sonangol and TAAG).
Derived as [(r − π(1+g) − g + αε(1+r)]/(1+g+π+gπ)) times previous period debt ratio, with r = interest rate; π = growth rate of GDP deflator; g = real GDP growth rate; α = share of foreign-currency denominated debt; and ε = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r − π (1+g) and the real growth contribution as −g.
The exchange rate contribution is derived from the numerator in footnote 2/ as αε(1+r).
For projections, this line includes exchange rate changes.
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP.
Derived as nominal interest expenditure divided by previous period debt stock.
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Angola: Public Sector Debt Sustainability Framework, 2007-2017
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Debt-stabilizing primary balance 9/ | ||||
| Baseline: Public sector debt 1/ | 21.4 | 31.6 | 36.4 | 37.6 | 31.5 | 28.5 | 30.6 | 32.1 | 33.9 | 35.8 | 36.9 | −0.8 | |||
| o/w foreign-currency denominated | 19.4 | 20.7 | 25.0 | 25.6 | 22.7 | 22.1 | 22.5 | 23.2 | 24.1 | 25.1 | 25.6 | ||||
| Change in public sector debt | −0.2 | 10.2 | 4.8 | 1.2 | −6.2 | −3.0 | 2.2 | 1.5 | 1.8 | 1.9 | 1.1 | ||||
| Identified debt-creating flows (4+7+12) | −11.6 | −1.2 | 13.3 | −12.5 | −18.1 | −9.4 | −3.8 | −3.3 | −2.7 | −0.5 | −0.4 | ||||
| Primary deficit | −5.6 | 3.6 | 6.4 | −6.4 | −11.3 | −7.4 | −3.1 | −2.3 | −1.6 | 0.4 | 0.7 | ||||
| Revenue and grants | 45.8 | 50.9 | 34.6 | 43.5 | 48.8 | 44.9 | 41.3 | 40.6 | 39.9 | 38.5 | 38.8 | ||||
| Primary (noninterest) expenditure | 40.2 | 54.6 | 41.0 | 37.1 | 37.5 | 37.5 | 38.2 | 38.2 | 38.3 | 38.9 | 39.6 | ||||
| Automatic debt dynamics 2/ | −5.9 | −4.8 | 6.9 | −6.1 | −6.8 | −2.0 | −0.7 | −1.0 | −1.0 | −0.9 | −1.1 | ||||
| Contribution from interest rate/growth differential 3/ | −5.0 | −4.9 | 2.6 | −6.8 | −7.4 | −2.0 | −0.7 | −1.0 | −1.0 | −0.9 | −1.1 | ||||
| Of which contribution from real interest rate | −1.4 | −2.7 | 3.4 | −5.8 | −6.2 | 0.0 | 0.7 | 0.4 | 0.5 | 0.7 | 0.6 | ||||
| Of which contribution from real GDP growth | −3.5 | −2.2 | −0.8 | −1.0 | −1.1 | −1.9 | −1.3 | −1.4 | −1.6 | −1.6 | −1.7 | ||||
| Contribution from exchange rate depreciation 4/ | −0.9 | 0.0 | 4.3 | 0.7 | 0. | … | … | … | … | … | … | ||||
| Other identified debt-creating flows | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Privatization receipts (negative) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Residual, including asset changes (2-3) 5/ | 11.3 | 11.4 | −8.5 | 13.6 | 12.0 | 6.4 | 5.9 | 4.8 | 4.5 | 2.4 | 1.5 | ||||
| Public sector debt-to-revenue ratio 1/ | 46.7 | 62.1 | 105.5 | 86.5 | 64.5 | 63.5 | 74.2 | 79.1 | 84.9 | 93.1 | 95.1 | ||||
| Gross financing need 6/ | 6.6 | 19.2 | 27.6 | 1.4 | −7.0 | 2.0 | 5.0 | 6.7 | 7.5 | 10.0 | 10.9 | ||||
| in billions of U.S. dollars | 4.0 | 16.2 | 20.8 | 1.1 | −7.3 | 2.3 | 5.9 | 8.3 | 10.0 | 14.4 | 16.7 | ||||
| Scenario with key variables at their historical averages 7/ | 28.5 | 27.9 | 26.2 | 24.5 | 21.0 | 17.1 | −2.5 | ||||||||
| Scenario with no policy change (constant primary balance) in 2012-2017 | 28.5 | 26.3 | 22.8 | 19.0 | 13.3 | 6.8 | −0.1 | ||||||||
| Key Macroeconomic and Fiscal Assumptions Underlying Baseline | |||||||||||||||
| Real GDP growth (in percent) | 22.6 | 13.8 | 2.4 | 3.4 | 3.9 | 6.8 | 5.0 | 5.1 | 5.3 | 5.2 | 5.3 | ||||
| Average nominal interest rate on public debt (in percent) 8/ | 6.3 | 5.2 | 2.7 | 2.9 | 3.7 | 4.5 | 5.4 | 5.5 | 5.5 | 5.4 | 5.2 | ||||
| Average real interest rate (nominal rate minus change in GDP deflator, in p | −6.3 | −14.4 | 10.1 | −19.5 | −20.5 | 0.2 | 2.7 | 1.7 | 2.0 | 2.4 | 2.0 | ||||
| Nominal appreciation (increase in US dollar value of local currency, in perc | 6.9 | −0.1 | −16.0 | −3.5 | −2.8 | … | … | … | … | … | … | ||||
| Inflation rate (GDP deflator, in percent) | 12.6 | 19.7 | −7.4 | 22.4 | 24.2 | 4.3 | 2.7 | 3.8 | 3.6 | 3.0 | 3.2 | ||||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 37.4 | 54.6 | −23.0 | −6.5 | 5.1 | 6.7 | 7.0 | 5.3 | 5.4 | 6.8 | 7.1 | ||||
| Primary deficit | −5.6 | 3.6 | 6.4 | −6.4 | −11.3 | −7.4 | −3.1 | −2.3 | −1.6 | 0.4 | 0.7 | ||||
Gross debt. Coverage: general government plus major SOEs (Sonangol and TAAG).
Derived as [(r − π(1+g) − g + αε(1+r)]/(1+g+π+gπ)) times previous period debt ratio, with r = interest rate; π = growth rate of GDP deflator; g = real GDP growth rate; α = share of foreign-currency denominated debt; and ε = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r − π (1+g) and the real growth contribution as −g.
The exchange rate contribution is derived from the numerator in footnote 2/ as αε(1+r).
For projections, this line includes exchange rate changes.
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP.
Derived as nominal interest expenditure divided by previous period debt stock.
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Angola: Public Debt Sustainability: Bound Tests 1/ 2/
(Public debt in percent of GDP)
Citation: IMF Staff Country Reports 2012, 215; 10.5089/9781475506662.002.A002
Sources: International Monetary Fund, country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ For historical scenarios, the historical averages are calculated over the four-year period, and the information is used to project debt dynamics five years ahead.3/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.4/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2013, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).
