Angola has released its 2025 macroeconomic outlook, projecting economic growth of 3.61%, according to the government’s recently shared Macroeconomic Executive Program.
The forecast, presented during a session of the Economic Commission of the Council of Ministers in Luanda, paints a mixed picture: promising growth momentum driven by the non-oil economy, but also persistent inflation expected to hit 18.4% by year-end.
This signals cautious optimism in a country still grappling with the aftershocks of volatile oil prices and structural economic imbalances. Angola’s gross domestic product grew by 4.4% in 2024 — a significant leap from the modest 0.9% expansion in 2023, suggesting that recent reforms and diversification efforts may be gaining traction. However, inflationary pressures remain a persistent threat, casting a long shadow over consumer confidence and spending power.
A Shift Away from Oil: The Rise of the Non-Oil Sector
One of the most noteworthy aspects of the forecast is the shift in growth drivers. Angola expects its non-oil sector to expand by 5.76% in 2025, helping cushion the impact of a projected 1.82% contraction in the oil and gas sector. This signals a gradual, though still fragile, diversification of the Angolan economy — an objective the government has long pursued to reduce overreliance on crude exports.
The expected rise in agriculture, manufacturing, construction, and services points to a reorientation of economic priorities. If this momentum is sustained, Angola could see stronger domestic value chains, job creation outside of oil, and a more resilient economic base. For local businesses and investors, this represents an opportunity to tap into emerging sectors that have traditionally been overlooked in favor of oil-related ventures.
Inflation Still a Drag on Households and Businesses
Despite the relatively positive growth forecast, the elephant in the room remains inflation. With prices expected to rise 18.4% over the course of 2025, the cost of living for ordinary Angolans will continue to soar — a trend that threatens to erode the benefits of GDP growth.
High inflation squeezes household incomes, diminishes purchasing power, and makes daily essentials more expensive. For businesses, especially small and medium enterprises, it means thinner profit margins, rising input costs, and tighter consumer demand. Unless mitigated by wage adjustments or targeted subsidies, this inflationary environment could undercut social stability and hinder real economic gains.
Investment Implications and the Policy Challenge
For investors, Angola’s growth story remains complex. On one hand, the strong performance of the non-oil sector creates compelling opportunities, particularly in agriculture, fintech, telecoms, and light manufacturing. On the other hand, inflation and structural inefficiencies still pose considerable risks. The government’s ability to manage monetary policy, stabilize prices, and promote a conducive investment climate will be critical in translating headline growth into meaningful development outcomes.
