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Significance
Starting today, this will increase the price of petrol at the pump from AOA160 (USD0.27) to AOA300 per litre. This occurs in a context of a weakening currency and high debt repayment obligations that are putting pressure on the budget. The decision also forms part of government efforts to free up resources for spending in the non-oil economy.
Impacts
Economic growth could be jeopardised if inflation increases substantially in response to higher import prices.
Government spending will be constrained as even more resources are allocated to meeting debt service obligations.
Budgetary pressure could accelerate the partial privatisation of the country’s large state-owned companies.
Privatisation measures could offer scope for increased corruption.
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2023
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