Angola's Fragile Stabilization

28 Pages Posted: 15 Feb 2006

See all articles by Jose Giancarlo Gasha

Jose Giancarlo Gasha

affiliation not provided to SSRN

G. Pastor

International Monetary Fund (IMF)

Date Written: May 2004

Abstract

This paper discusses the nature of Angola`s disinflation strategy in recent years, with special emphasis on the most recent efforts by the Angolan authorities to stabilize the economy. Looking to the past, the paper stresses the costs of the disinflation strategy, as measured by the central bank sizable foreign exchange intervention and the increase in Angola`s external liabilities that unfolded in the process. The paper also notes that non-oil fiscal deficits have remained very large. Looking to the future, the paper stresses the pressing need to reduce demand pressures stemming from sizable government spending on wages and salaries, goods and services, subsidies, and other current transfers to the economy. The prescribed fiscal consolidation effort is viewed as critical to curtail the non-oil fiscal deficit, reduce inflation expectations on a lasting basis, and avoid further foreign borrowing on commercial terms, including loans collateralized by future oil revenues.

Keywords: Stabilization policy, monetary and exchange rate policy, fiscal policy

JEL Classification: E52, E58, E65

Suggested Citation

Gasha, Jose Giancarlo and Pastor, G., Angola's Fragile Stabilization (May 2004). IMF Working Paper No. 04/83, Available at SSRN: https://ssrn.com/abstract=878906

Jose Giancarlo Gasha (Contact Author)

affiliation not provided to SSRN

No Address Available

G. Pastor

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
100
Abstract Views
1,083
Rank
571,054
PlumX Metrics