Banco de Fomento Angola (BFA) anticipates that budgetary performance this year will be more favorable than forecast, estimating a deficit of 1.7% of Gross Domestic Product (GDP), below the 2.8% projected by the Angolan government.
In the briefing note “OGE 2026: A More Favorable Fiscal Scenario”, BFA analysts justify the forecast with an average oil price higher than that assumed by the government and a “more restrained execution of expenditure.”
“The Government forecasts an overall negative balance of around 2.8% of GDP, reflecting the fact that, overall, total expenditure is expected to exceed total revenue, maintaining the need to resort to additional financing. By contrast, our estimates point to a more moderate deficit, close to 1.7% of GDP, which indicates less pressure on public accounts and a potentially more controlled debt trajectory,” the report states.
The 2026 State Budget (OGE) was prepared based on an average oil price of around 61 dollars per barrel (approximately 52 euros), while BFA assumes a reference price of 65.6 dollars (around 56 euros).
According to the bank’s Economic Research Office, this framework should translate into a “more favorable fiscal scenario,” with slightly lower pressure on financing needs and greater room for public debt consolidation.
BFA forecasts more moderate economic growth but also lower average inflation in 2026 compared to the Angolan executive.
While the OGE assumes GDP growth of 4.2% and inflation of 13.7%, the bank estimates growth of around 3.6% and average inflation of 12.6%.
The divergence also extends to the primary balance. The Government anticipates a surplus close to 0.4% of GDP, but BFA points to a primary balance of around 1.4%, justifying this difference with higher oil revenues than those projected in the OGE, benefiting from a higher average oil price.
The bank also highlights the non-oil primary balance, a key indicator for assessing the sustainability of public finances without the contribution of oil.
The Executive forecasts a deficit of around 5.1% of GDP, above the limit defined in the Public Debt Sustainability Law, while BFA projects a lower figure, close to 4.4%.
Based on official assumptions, the Executive forecasts current revenues of 18.2 trillion kwanzas (around 17.1 billion euros) and current expenditure of 16.6 trillion kwanzas (15.6 billion euros), while BFA estimates point to current revenues slightly above 18.4 trillion kwanzas (17.3 billion euros) and lower current expenditure execution of around 15.3 trillion kwanzas (14.4 billion euros).
On the revenue side, BFA estimates oil revenues of 8.2 trillion kwanzas (7.7 billion euros), above the 7.5 trillion in the OGE (7.1 billion euros), but projects non-oil revenues below forecast, at 10.2 trillion kwanzas (9.6 billion euros), compared with 10.7 trillion projected by the Executive (10.1 billion euros).
“On our side, we estimate that oil revenues will be around 9.0% higher than those forecast in the OGE, essentially due to the positive oil price differential we assume, although production is also lower. Conversely, we project non-oil revenues around 4.4% below those forecast, as a result of more subdued economic growth,” the analysis notes.
Source: Lusa
