World Bank sees no Angola growth, but hopes in oil
The World Bank said on Tuesday it now expects zero economic growth in Angola this year, revising a forecast for a three percent contraction.
Senior Angola World Bank economist Ricardo Gazel told Reuters the country’s decision to pump more oil than the output quota set by the Organisation of Petroleum Exporting Countries (OPEC) would allow it to avoid negative growth this year.
“I now expect zero growth for the Angolan economy this year, the main reason being that Angola will be producing above its OPEC quota,” Gazel said.
Angola has violated its output quota ever since it became president of the 12-member group in January, according to traders.
According to an internal OPEC document widely circulated in the media, its quota is 1.52 million barrels per day (bpd), although Angola has said it is 1.656 million bpd.
In June, Angola overtook Nigeria as Africa’s biggest oil producer, pumping around 1.82 million bpd, according to Reuters figures. It plans to produce an average 1.79 million bpd in 2009, according to Angola’s revised budget for this year.
Angolan Oil Minister Jose Botelho de Vasconcelos recently defended his country by saying it merits understanding from OPEC as it struggles to rebuild infrastructure after a devastating 27-year civil war that ended in 2002.
Angola has asked OPEC to grant it similar treatment to Iraq — the only OPEC member exempt from output cuts.
Analysts say such an unlikely exemption would be a shot-in-the arm to the oil-dependent nation.
It would also help Angola, which needs oil for 90 percent of its revenues, increase its foreign exchange reserves. Those reserves have plunged 30.5 percent to 12.1 billion in the January to June period, according to the central bank.
“The government’s decision to increase production will help counter the drop in reserves,” said Gazel, adding that if oil prices remain at current levels foreign exchange reserves should increase in coming months.
The African nation emerged from the war as one of the world’s fastest-growing economies on the back of record oil prices and billions of dollars in loans from China to rebuild roads, bridges and ailing communications.
From lows beneath $33 a barrel last December, oil prices have risen to around $71 a barrel following OPEC’s decision to cut production by 4.2 million barrels from September levels. The organisation will meet again next month in Vienna.