The signature of Luena peace agreement and the succeeding Peace affirmation and consolidation process has approximately coincided with the final stage of the economic recession which the World Economy was in. At that time, the emergence of growing economies as of China and other developing countries as India and Brazil has had a strong impact on its commercial partners.
Angola, by betting on the strengthening of economic relations with countries which have high growth rates has positively beneficiated from the effects of those relations, occupying a prominent place among Sub-Saharan Africa.
Growth rates of China and Developing Countries in 2004 were of 9.5% and 7.3% respectively. These values clearly differ from the performance of Euro area countries and Japan with growth rates of 2% and 2.7%, respectively.
In 2004, Angola’s economic growth rate was higher to the average of the African Continent, positioning itself above 7%. Only five other African countries reached this value. In 2005, the economic growth rate increased, reaching 1.7% to the petroleum sector and 10.4% to the remaining economy sectors, which represented, 15.5% of joint growth. In nominal terms, the Gross Domestic Product records an increase of 9,500 million USD in 2001 to 30,300 million USD in 2005, which represents an annual growth rate higher to 36%. The petroleum industry owns a prominent part in Angola’s economy by contributing with 57% to GDP in 2005.
Important to understand the mismatch between nominal and real values is the evolution of the inflation rate. Since 2003, this indicator has been decreasing, reaching 17.7 in 2005, value which is substantially inferior to 76.5% from the two previous years. In the field of public accounts, in 2004, the tax revenue represented 36.8% of GDP. This value has been stable due the two forces in opposite directions: the decrease of the average rate of income tax on the petroleum sector and the increase on the price of crude oil in the international markets.
Excluding capital amortization, the budgetary outlay has been decreasing, reaching 35.7% of GDP value. Regarding capital expenditure, it has increased from 4.4% of GDP in 2004 to 8.3% in the following year, which clearly shows the efforts on Country’s infrastructure rebuilding and rehabilitation. Public Budgets of 2006 determined this indicator in 21.8%, which represents a percentage increase to almost a triple towards the previous year. As consequence, we assist to an advancing integration of Angola in regional groups, indicating a strengthening of economical and diplomatic relations with neighbour countries as well as the consolidation of market economy.
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