Single-digit inflation. For the first time since 2015, Angola can say those words. The Bank of Angola confirmed this week that annual price growth slowed to 8.78% in August, and policymakers responded by cutting the benchmark rate by 100 basis points to 14.75% — the third consecutive cut this year and the clearest signal yet that officials believe the worst of the country’s long inflationary squeeze is over.
Governor Manuel Tiago Dias has now delivered three straight cuts this year — a 50 basis point move in May, a larger 125 basis point cut in July, and this latest 100 basis point reduction — tracking a steady decline from double-digit territory that once felt entrenched. The central bank’s own growth forecasts have moved in tandem: officials now expect the economy to expand faster in 2026 than earlier projections suggested, a shift attributed to easing price pressures freeing up household spending and business investment alike.
The backdrop matters. Angola’s economy has long been hostage to swings in oil prices and a volatile kwanza, both of which fed years of double-digit, occasionally near-30%, inflation that eroded savings and made long-term business planning close to impossible. The disinflation trend that culminated in this week’s announcement began building through 2025 and into 2026, helped by a more disciplined government budget, tighter fiscal management, and a currency that has held steadier than in previous cycles.
For businesses, a falling policy rate is a tangible signal, though not an instant one — commercial banks typically take time to pass lower benchmark rates through to the loans that actually fund working capital, equipment purchases and expansion. Still, the direction of travel gives Angolan companies something they have rarely had: a credible basis for planning beyond the next quarter. Cheaper borrowing costs, if they materialise at the retail level, could support non-oil sectors that Luanda has spent years trying to grow as a hedge against its continued dependence on crude exports.
Governor Dias has been careful to temper optimism with caution, noting that the pace of further easing will depend on how inflation, the exchange rate, global commodity prices and domestic liquidity conditions evolve — and flagging that uncertainty tied to the conflict in the Middle East remains a wildcard for oil-exporting economies like Angola’s. Ten provinces had already recorded single-digit inflation individually before the national figure caught up, suggesting the trend has some breadth rather than being a one-off statistical quirk.
Angola is not out of the woods. Oil still dominates export earnings, and the country’s fortunes remain tied to a commodity it does not control the price of. But three consecutive rate cuts and a national inflation print starting with an “8” mark a genuine milestone in Angola’s long climb back from crisis-era price instability — and give the central bank real room to keep supporting growth if the trend holds.