Angola Infrastructure Report Q2 2016
BMI View: The Angolan government will struggle to devote significant financial attention to its keyinfrastructure projects over 2016 given the wide fiscal deficit and decreased revenues owing to low oilprices. We expect a substantial uptick in growth for the construction sector from 2020 onwards as thecountry's fiscal position improves, though note the government will need to address pervasive corruptionand ease labour market restrictions to attract necessary private investment.
Latest Updates And Structural Trends
We are maintaining our forecast of 2.5% real growth in 2016 as the fiscal budget remains in the redowing to low oil prices, thereby diverting funds away from infrastructure development.
The second half of our forecast period (2021-2025) will see the highest growth, averaging 6.7% in realterms. This is a result of investment flows into infrastructure to support the oil industry, in line with theexpected recovery in Brent Crude oil prices.
The USD5.2bn credit line granted by the Chinese government in 2015 will provide support for projects inthe utilities and residential sectors and into industrial and commercial construction.
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