Historical Inflation in Angola
Angola’s inflation history is one of extreme volatility, spanning episodes of hyperinflation during the civil war, hard-won stabilization in the 2000s, and a renewed inflationary cycle tied to the post-2014 oil crash and currency realignment. The current rate of 15.7% YoY (December 2025) represents the most favorable price environment in nearly three years, yet remains elevated by global standards and well above the BNA’s implicit comfort zone.
Inflation Timeline
| Period | Inflation Range | Context |
|---|---|---|
| 1991-1996 | 1,000-4,000%+ | Civil war hyperinflation, monetary collapse |
| 1997-2000 | 100-300% | Post-Lusaka Protocol instability, kwanza introduction |
| 2001-2002 | 100-150% | War’s final phase, fiscal indiscipline |
| 2003-2008 | 12-30% | Post-war stabilization, oil boom, aggressive monetary tightening |
| 2009-2014 | 7-15% | Price stability era, FX peg, oil-funded fiscal expansion |
| 2015-2017 | 20-42% | Oil crash, FX reserve depletion, import price shock |
| 2018-2019 | 17-20% | Kwanza devaluation under new FX regime, gradual stabilization |
| 2020-2021 | 22-25% | COVID-19, supply disruptions, further FX adjustment |
| 2022-2023 | 13-21% | Volatile, oil price-driven FX relief then reversal |
| Mid-2024 | 30%+ | Peak of current cycle, FX pass-through, subsidy reform |
| Dec 2025 | 15.7% | Disinflation confirmed, BNA cuts underway |
The Hyperinflation Era (1991-2002)
Angola experienced some of the most severe hyperinflation in African economic history during the civil war. Fiscal deficits financed by money printing, the collapse of productive capacity, and the destruction of transport infrastructure created conditions where annual inflation exceeded 4,000% in the mid-1990s. Multiple currency reforms – including the introduction of the new kwanza in 1999 – failed to anchor expectations until the war ended in 2002.
The Stabilization Decade (2003-2014)
The end of the civil war and the concurrent oil price boom transformed Angola’s fiscal position, enabling the BNA to pursue aggressive stabilization. A de facto peg to the US dollar anchored inflation expectations, with the exchange rate serving as the nominal anchor for the economy. By 2012-2014, inflation had declined to single digits – the lowest sustained levels in Angola’s post-independence history.
This stability, however, was built on an unsustainable foundation: massive oil revenue that financed government spending and provided the FX reserves needed to maintain the currency peg. When oil prices collapsed in 2014-2016, the stabilization architecture crumbled.
The Adjustment Cycle (2015-2021)
The oil price crash exposed the fragility of Angola’s price stability. The sequence of events:
- FX reserve depletion (2015-2017): The BNA spent reserves defending the kwanza peg, depleting buffers from $30B+ to under $15B
- Managed devaluation (2018): Under President Lourenco, the government adopted a managed float, allowing the kwanza to depreciate by over 40% initially
- Pass-through inflation: Currency weakness fed directly into import prices (food, consumer goods, inputs), driving CPI above 40% in 2016
- Gradual stabilization (2019-2021): As the FX adjustment was absorbed, inflation declined to the 20-25% range, though the COVID-19 pandemic and supply disruptions prevented a return to single digits
The Current Cycle (2022-Present)
The most recent inflation cycle was driven by a combination of factors:
- Global commodity price volatility following Russia’s invasion of Ukraine (2022)
- Renewed kwanza weakness in 2023-2024 as oil prices moderated
- Fuel subsidy reductions feeding through to transport and food costs
- Fiscal expansion ahead of the 2022 elections
The peak of over 30% in mid-2024 prompted the BNA to maintain its 20% policy rate throughout 2024. As inflation began declining in late 2024, the central bank pivoted to rate cuts in mid-2025, reducing the policy rate to 17.5% by January 2026.
Structural Inflation Drivers
Beyond cyclical factors, Angola faces persistent structural inflation from:
- Import dependence: With 80% of food imported, domestic prices are structurally linked to global markets and FX movements
- Administered price adjustments: Ongoing fuel, utility, and tariff reforms create episodic inflation impulses
- Limited competition: Concentrated banking and retail sectors allow pricing power
- Expectations inertia: Decades of high inflation have embedded backward-looking indexation in wage and price-setting behavior
Outlook
The BNA’s outlook and international forecasters project inflation declining to 12-13% by end-2026, which would be the lowest rate since 2021. Achieving and sustaining single-digit inflation – the aspirational goal – requires not just monetary discipline but structural reforms to food supply chains, agricultural productivity, market competition, and the institutional credibility of the BNA as an inflation-targeting central bank.