The International Monetary Fund (IMF) has lowered its projection for Angola’s economic growth in 2025 to 2.1 percent, citing declining oil production and rising debt obligations as primary challenges.

Oil remains central to Angola’s economy, accounting for around 94 percent of exports and 60 percent of government revenue. Production declines have weighed heavily on fiscal stability, prompting efforts to attract foreign investment. Projects such as the Azule Energy joint venture, which plans to invest $5 billion in oil and gas operations over the next five years, aim to reverse the downward trend.

The IMF has urged Angola to limit new borrowing, reduce public expenditures, and adopt a flexible exchange rate policy to safeguard macroeconomic stability. Analysts caution that the country’s heavy reliance on debt, including external obligations like the upcoming Eurobond repayment, could amplify fiscal pressures and constrain other development priorities.

In addition, Angola is pursuing debt reduction efforts with China, primarily linked to oil financing, while advancing domestic energy infrastructure. The Cabinda refinery, with a planned capacity of 30,000 barrels per day, is expected to start operations by the end of 2025, and the larger Lobito refinery project aims to reach 200,000 barrels per day, reducing dependence on fuel imports.

Inflation remains a concern, with consumer prices projected to rise by 22 percent this year. The IMF recommends that Angola maintain a flexible exchange rate and diversify its sources of finance to mitigate vulnerabilities, strengthen investor confidence, and support long-term economic stability.