Angola’s annual inflation rate has fallen below 10 percent for the first time in nearly 11 years, strengthening signs that price pressures are easing after years of high inflation and giving the central bank more room to consider further interest rate cuts.
Inflation slowed to 9.33 percent in July from 10.11 percent in June, according to the National Statistics Institute. The latest reading is close to the lowest level recorded in the country’s consumer price index series since 2015.
The July figure represents a 0.78 percentage point decline from June and is about 10 percentage points lower than a year earlier, extending a sustained period of easing price pressures.
The statistics agency attributed the continued slowdown largely to the stability of the kwanza and improved domestic supplies of essential goods. The July reading marked the 24th consecutive month of declining annual inflation.
The easing trend has already allowed the Banco Nacional de Angola to begin reducing borrowing costs. On July 14, the central bank cut its benchmark interest rate by 125 basis points to 15.75 percent, citing the continued improvement in inflation.
However, the decline in headline inflation has not been evenly spread across the economy. Education recorded the highest annual price increase at 25.24 percent, while food and non alcoholic beverages rose 10.40 percent.
Housing, water, electricity and fuel prices increased 10.17 percent, while healthcare costs rose 10.16 percent.
Food and non alcoholic beverages remained the biggest contributor to the overall price level, keeping pressure on household budgets even as headline inflation moved into single digits.
On a monthly basis, consumer prices increased 0.75 percent in July, compared with 0.52 percent in June, showing that the slowdown in annual inflation does not mean price increases have stopped.
Transportation recorded one of the sharpest improvements, with annual inflation falling to 3.65 percent in July from 15.40 percent in June. Prices also eased across clothing and footwear, housing and utilities, and miscellaneous goods and services.
The decline in inflation remains uneven across Angola’s provinces. Cuanza Norte recorded the lowest annual inflation rate at 6 percent, followed by Huambo at 6.59 percent and Cunene at 6.86 percent.
At the other end of the scale, Cabinda recorded inflation of 13.09 percent, while Malanje and Lunda Sul posted rates of 12.01 percent and 11.40 percent respectively.
The wide gap between provinces shows that the improvement in national inflation has not translated into uniform price relief across the country, particularly for households facing higher costs for food, education and basic services.
The latest figures nevertheless strengthen the case for a gradual easing of monetary policy if the downward trend continues. Investors and businesses will be watching August inflation closely for signs of whether Angola can sustain the progress and how quickly lower inflation could translate into cheaper credit and stronger consumer and business activity.
For households, the move below 10 percent is an important improvement, but the continued rise in essential goods and services means the cost of living remains a concern even as the broader inflation picture improves.