Angola: New GDP figures raise fresh debt worries

Revised official GDP figures show that Angola’s economic slump is even worse than we’d thought. The revisions add to our concerns about the sustainability of the country’s large debt burden. Angola’s statistics agency could hardly have drawn less attention to its latest GDP figures; the data were buried on page 28 of a document published over the weekend. This low-key release belies – or, indeed, obscures – the importance of the new data. The figures have two key implications. First, Angola’s economic slowdown has been much more pronounced than we – or other analysts – had believed. It now seems that GDP fell by 4.7% y/y over the first three quarters of 2016.  Based on previous figures, we had assumed that the economy stagnated last year. Having already overtaken Nigeria as Africa’s largest oil producer, Angola has now clinched the Federal Republic’s place as the continent’s worst-performing large economy. Second, significant revisions to Angola’s GDP figures raise serious questions about the sustainability of the country’s large debt load. The Angolan authorities have yet to release updated nominal GDP figures that align with the new growth numbers. But, assuming that the GDP deflator remains unchanged, we estimate that Angola’s GDP was about 7% smaller in 2016 than had been previously reported. This would increase the country’s debt-to-GDP ratio by about 5%-pts of GDP.