Angola: Fitch raises 2021 inflation estimate from 21.5% to 23.5%

Login

Register

http://www.clubofmozambique.com/

Angola: Fitch raises 2021 inflation estimate from 21.5% to 23.5%

8:27 CAT | 07 Jul 2021

File photo: Lusa

The consultancy Fitch Solutions has revised upwards its estimate for inflation for this year in Angola, due to the increase in interest rates by the central bank and now expects prices to rise by 23.5%.

“We believe that for the rest of the year the central bank will maintain the reference interest rate at 20%, although the risks to our forecast are upward,” according to the analysts from the consulting company owned by the same owners of the Fitch Ratings agency, which raised its forecast for price rises from 21.5% to 23.5%.

In the note sent to clients, to which Lusa had access, the analysts noted, however, that the slower than anticipated moderation of prices, together with the renewed commitment of the central bank to control inflation, may lead to an increase in the rate later this year.

The central bank raised its key interest rates by 450 basis points (4.5 percentage points) to 20% at this month’s meeting, the first increase in over three years, which, for Fitch, reflects parliament’s decision last month to revise the central bank’s mandate to give it a greater focus on price stability.

This increase led Fitch to revise its forecast for the rate, which analysts anticipate will remain at 20% until the end of the year, as inflation stood at 24.9% in May, the highest rate since December of last year, when it was 25.1% and the second-highest in the last four years.

Source: Lusa