The Monetary Policy Committee (CPM) of the National Bank of Angola met on 18 and 19 July 2024, in the city of Menongue, Cuando Cubango province, and took the following decisions:
- Maintain the BNA Rate at 19.5% (nineteen point five percent);
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- Maintain the interest rate of the Permanent Liquidity Provision Facility at 20.5% (twenty point five percent); and
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- Maintain the interest rate of the Permanent Liquidity Absorption Facility at 18.5% (eighteen point five percent).
These decisions were motivated by the prospect of a slowdown in the pace of price growth in the economy, resulting from the relative improvement in the supply of essential consumer goods and liquidity control.
International Situation
The International Monetary Fund, in projections published in July, maintained the global GDP growth rate at 3.2% and forecasts growth of 3.5% for 2025.
The slowdown in global inflation is showing signs of easing, reflecting the dynamics of services inflation, which is mitigating the positive impact of the reduction in goods inflation.
In the energy commodities market, the average price of oil remained stable in the months of May and June, influenced both by lower global demand and by the continuation of geopolitical tensions in the Middle East.
National Economy
According to price statistics released by the National Statistics Institute (INE), monthly inflation in June slowed to 2.07%, compared to 2.49% observed in the previous month, with the Food and Non-Alcoholic Beverages class contributing 64%.
It is worth noting that 24 of the 732 products that make up the National Consumer Price Index (IPCN) matrix contributed 1.15 percentage points to total inflation, which corresponds to 55.75% of total inflation, with emphasis on Tomatoes (0.16 percentage points), Onions (0.10 percentage points) and Chicken Thighs (0.09 percentage points).
The accumulated inflation rate since the beginning of the year was 15.72% and the year-on-year rate was 31.00%, with a contribution of 66.58% from the Food and Non-Alcoholic Beverages class.
In the monetary domain, the Monetary Base in national currency expanded by 0.21% in June, after having contracted by 1.67% in the previous month. In accumulated terms, since the beginning of the year, the Monetary Base in national currency expanded by 4.34%.
In turn, the M2 monetary aggregate, in national currency, contracted by 0.30% in June, after having contracted by 1.26% in May. In accumulated terms, M2 in MN expanded by 3.43%.
The stock of credit to the economy, in national currency, reached 4.93 billion Kwanzas in June, representing an increase of 359.53 billion Kwanzas in the first half of the year.
In the external sector, the balance of the goods account reached 11.25 billion US dollars in the first half of 2024, up from 9.21 billion in the same period last year, corresponding to an increase of 22.15%, or 2.04 billion US dollars.
The increase in the balance of the goods account was influenced by the increase in the value of exports and the decrease in imports. Export revenues increased by 4.20% (713.02 million US dollars), as a result of the increase in the price of Angolan raw materials by 7.20% and the quantities exported by 2.56%.
In turn, the value of imports decreased by 17.06% (1.33 billion US dollars), having gone from 7.78 billion US dollars in the same period of 2023 to 6.45 billion US dollars. However, imports of essential consumer goods increased by 3.43% (14.83 billion US dollars).
The stock of International Reserves stood at 14.44 billion United States Dollars in June, which corresponds to a coverage level of 7.20 months of imports of goods and services.
The next CPM meeting will be held in Luanda, on 19 and 20 September 2024.
Bank of Angola Monetary Policy Committee (CPM)