The International Monetary Fund (IMF) has lowered Angola’s 2025 economic growth forecast to 2.1% from 2.4%, citing weaker oil exports, and warned that risks around the country’s ability to meet its debt obligations have risen.
“Angola has been hit by volatility in oil prices and sovereign spreads, and weaknesses in oil production in the first half of 2025, amplifying the impact of those shocks,” the IMF said on Friday after its board reviewed the findings of a staff mission to Luanda in May.
The Fund urged the Southern African nation to take a cautious approach to borrowing and spending, adding that “greater foreign exchange rate flexibility is also something the country must embrace.”
It cautioned against two “potentially unsustainable” financing options: heavy domestic borrowing and costly short-term external debt. “Excessive reliance on domestic financing risks further increasing banks’ sovereign exposure,” it said, while short-term borrowing could mean “accumulating onerous debt service, potentially undermining investor confidence, and ultimately delaying market access on more favorable terms.”
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The IMF stressed that Angola’s debt repayment capacity remains “adequate,” but noted that risks to this assessment “have increased from last year.”
Angola’s finances came under pressure earlier this year when it was required to post an additional $200 million in security to JPMorgan after a bond used as collateral for a loan lost value, before the amount was later refunded when the bond rebounded.
The IMF mission to Luanda in May, conducted as part of a Post Financing Assessment, warned that Angola still faces challenges from “potentially lower prices of crude oil and tightening external financing conditions.” The government is also racing to cut down on oil-backed loans to China to ease fiscal strain.
