Angola's government has set an ambitious economic growth target of 5.5% for 2027, according to the draft budget. This projection is built on an assumed average oil price of US$71 a barrel. The plan focuses on non-oil diversification to counterbalance declining crude output and increasing debt-service costs. The budget forecasts a 3.8% contraction in oil output, while non-oil sectors are expected to grow by approximately 7.2%.
The decline in oil production is evident, with crude output projected at around 1.0 million barrels per day in 2027. This represents a decrease of about 50,000 barrels per day from the 2026 level of approximately 1.046 million barrels per day. As a result, domestic activity will drive the overall growth figure. The government's growth strategy relies heavily on sectors outside petroleum, such as manufacturing, communications, and commerce.
These non-oil sectors have shown promising growth, supporting stronger activity in the first half of 2026, according to World Bank data. GDP grew 5.3% year on year in the first quarter of 2026. Angola's growth has been steadily accelerating, with a 3.1% growth rate in 2025, rising to 4.5% in 2026, and now targeting 5.5% in 2027. This upward trend indicates a positive outlook for the country's economy.
The proposed 2027 budget totals approximately 37.34 trillion kwanza, equivalent to about US$40.9 billion at the reference exchange rate. The government faces significant gross financing needs, reaching around 15.48 trillion kwanza, with about 8.72 trillion kwanza allocated for debt repayments. This substantial debt-service load limits room for new public investment and emphasizes the importance of fiscal discipline in Angola's credit outlook.
Despite these challenges, moderating inflation could improve planning conditions for companies operating outside the oil sector. This benefit hinges on sustained currency stability and disciplined spending by the government. The draft budget projects a fiscal deficit of approximately 4.11% of GDP. The budget still requires parliamentary consideration and may undergo changes before final approval.
Investors should closely monitor the approved budget text, oil price movements, production guidance from Sonangol, and evidence that non-oil activity can sustain the 7.2% expansion projected by the government. The 2027 budget's success depends on the government's ability to implement its plans and maintain economic stability. External observers had previously forecast a 3.3% growth rate for 2027, which is lower than the government's current target.
The 2027 budget's focus on non-oil sectors and fiscal discipline reflects the government's efforts to promote sustainable economic growth. By diversifying its economy and managing its finances effectively, Angola aims to achieve its growth targets and improve its credit outlook. The country's economic growth acceleration is evident, with GDP growth rates of 3.1% in 2025, 4.5% in 2026, and a targeted 5.5% in 2027.
Key points
- Angola's 2027 budget targets 5.5% GDP growth, driven by 7.2% growth in non-oil sectors.
- The budget forecasts a 3.8% contraction in oil output, with crude production projected at around 1.0 million barrels per day.
- The government's growth strategy relies on non-oil sectors, such as manufacturing, communications, and commerce.
