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Food prices continue to rise amid worsening economic conditions

  • Key Message Update
  • Angola
  • September 2023
Food prices continue to rise amid worsening economic conditions

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  • Key Messages
  • Key Messages
    • Official reports from the Central Bank of Angola suggest that food inflation increased from 12.4 percent in July to 15.3 percent in August and headline inflation increased from 12.1 percent to 13.5 percent over the same period. However, key informants suggest that the magnitude of price increases is higher than officially reported. This sentiment is being echoed by various economic analyses from the Catholic University in Luanda and the Center of Economic Studies from Lusiada University, which assess that the core inflation is near or above 25 percent. This difference in perception is likely contributing to price speculation by traders. 
    • These economic challenges are increasingly visible as the lag effects of the Kwanza depreciation and reduction in import levels (as only imports deemed essential by the Ministry of Economy and Planning have access to forex) are reflected in rising food prices. Key informants in the capital report that the price of bread, a product highly favored by urban and suburban poor households, has seen an increase of 17 percent in Luanda from July to mid-September, from 60 AOA to 70 AOA. 
    • The supply of labor in construction projects is also likely declining due to a slowdown in the financing of these projects, as confirmed by the Minister of Finance. Most poor and very poor households are likely waiting for the 2023/24 agricultural season for casual agricultural labor opportunities. 
    • The Ministry of Agriculture has begun preparations for the distribution of agricultural inputs to poor households, targeting mostly those in the provinces of Huila, Huambo, Bie, Uige, Zaire, Malanje and Cuanza Sul, which are relatively highly productive regions and regions that observed a poor nacas season. While the distribution of inputs will support crop production in these areas, the forecast El Niño is expected to drive below-average rainfall, lowering harvest prospects. An analysis of analog years suggests that likelihood of below-average rainfall is high in the southeast of the country, but relatively lower in the southwest of the country.
    • The economic impacts observed in Angola currently are somewhat worse than originally anticipated, namely the prices of food and non-food items continue to rise to levels higher than previously expected. FEWS NET anticipates that an increasing number of people are likely to face Crisis (IPC Phase 3) outcomes through the peak of the lean season in early 2024. FEWS NET will update its assumption on economic conditions and any revisions to the projected food security outcomes in Angola in the October 2023 Remote Monitoring Report. Huila, Cunene, Namibe, Bie, and Huambo provinces remain of highest concern.  

    This Key Message Update provides a high-level analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography. Learn more here.

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