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Economic developments in Portuguese-speaking African countries and Timor-Leste2016|2017

Lisbon, 2017 • www.bportugal.pt

Economic developments in Portuguese-speaking African countries and Timor-Leste • Banco de Portugal Rua do Comércio,

148 | 1100-150 Lisboa • www.bportugal.pt • Edition International Relations Department • Design and printing

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5

ForewordWith the goal of contributing to a better understanding of the current economic conditions in the Portuguese-speaking African countries and Timor-Leste, Banco de Portugal has released the publication Economic Developments In Portuguese-speaking African Countries and Timor-Leste since 1994, through which it presents key macroeconomic data for each economy and information on its economic and financial relations with Portugal.

Except for the 'International environment' chapter, the texts presented here were prepared on the basis of information received up to the end of July

2017, which in some cases may be subsequently revised, as it corresponds to estimates or preliminary data.

The cooperation of various entities contacted for the necessary data was key to the preparation of this report, as is always the case. These include the central banks of Angola, Cabo Verde, Mozambique, São Tomé and Príncipe and Timor-Leste and the national branch of the Central Bank of West African States in Guinea-Bissau.

October 2017

1.International environment

9

1.1. Recent developments and outlook World economic performance in the first half of 2017 justifies expectations of an upward revision of growth in 2017 and 2018.

Despite these signs of economic activity picking up again, many of the advanced economies continue to show low inflation, low productivity growth and an ageing population. The emerging and developing economies still face difficulties in returning to growth in per capita income and in adapting to the low-price environment for the commodities they export.

This adaptation is especially relevant given that international commodity prices continued their downward trend in the most recent months of 2017, most notably for oil, natural gas and some agricultural goods. These price reductions seem to be linked to higher than expected production or export levels by the United States and other global producers.

Along with the decreasing prices of important commodities, a set of factors contributed to a global low-inflation environment. For the advanced economies, these factors relate to falling unemployment being reflected weakly in increasing wages and to low productivity

growth. For the case of the emerging and developing economies, the general trend has been determined by the economic conjuncture in some of the major economies. This includes the price shock on foodstuffs in India and the economic slack accumulated during the recession in Brazil. South Africa and Russia are part of the falling inflation trend.

The resumption of capital flows towards the emerging economies showed signs of consolidation in the first half of 2017. The increase in capital flowing to the Chinese economy and the global recovery in portfolio investments are likely to have played a key role in that consolidation.

In the first half of 2017, growth in advanced economies has recovered more strongly than expected. For growth not to slow down as these economies approach their potential output, challenges inherent to the ageing population must be overcome, productivity growth must be revitalised and the working population's employability must be promoted. Expectations about a fiscal stimulus in the United States have not been confirmed, due to which moderate normalisation of US monetary policy is predicted.

Chart 1.1 • Real GDPAnnual percent change | Selected economies

Chart 1.2 • Inflation Year-on-year percent changes of the CPI | Selected economies

-5.0 0.0 5.0 10.0

World

Advanced economies

United States

Euro area

Japan

Emerging and developing economies

Emerging and developing Asia

Latin America and the Caribbean

Sub-saharan Africa

2015 2016 2017

0.0 5.0 10.0 15.0

World

Advanced economies

United States

Euro area

Japan




Sub-saharan Africa

2015 2016 2017

Source: IMF, World Economic Outlook Database, July 2017.

International environment

BANCO DE PORTUGAL • Economic Developments in Portuguese-speaking African Countries and Timor-Leste • 2016 | 201710

In 2017, the emerging and developing economies as a whole have shown a slight increase in their growth rate.

This is the situation namely for emerging and developing Asia. The expansionary fiscal policy and the structural reforms under way in China resulted in a good performance in the first half of 2017. However, concern may intensify over the accumulation of debt. Symmetrically, the Indian economy should see its 2017 performance disrupted by tax and monetary reform with a potential positive impact over the medium term, but generating costs over the short term.

In Latin America and the Caribbean, the recovery should be particularly sharp in 2017. Similarly to the region as a whole, the outlook is favourable for Brazil and Argentina to transition from negative to positive growth rates, while growth in the Mexican economy is showing signs of slowing down.

After the slowdown in 2016 in Sub-Saharan Africa, growth is expected to accelerate in 2017, with a recovery in Nigeria – supported by rallying oil production and a solid performance from the agricultural sector – and strong growth prospects among fuel-importing countries.

After slowing down for years, international trade is showing signs of acceleration in 2017. Over the last few decades, trading has been an important driver of productivity growth. In a context where promoting economic growth faces structural challenges in advanced economies and where there is little room for fiscal stimulus in many emerging and developing economies, trade openness becomes one of the main instruments still available for creating a new structural and sustainable growth momentum.

Chart 1.3 • External current account Percentage of GDP | Selected economies

Chart 1.4 • Fiscal balance Percentage of GDP | Selected economies

-10.0 -5.0 0.0 5.0

Advanced economies

United States

Euro area

Japan




Sub-saharan Africa

2015 2016 2017

-8.0 -6.0 -4.0 -2.0 0.0

Advanced economies

United States

Euro area

Japan




Sub-Saharan Africa

2015 2016 2017

Source:IMF, World Economic Outlook Database, July 2017.

2.Economic developments in Portuguese- speaking African countries and Timor-Leste2.1. Angola

2.2. Cabo Verde

2.3. Guiné-Bissau

2.4. Mozambique

2.5. São Tomé e Príncipe

2.6. Timor-Leste

2.1. AngolaArea: 1,246,700 Km2

Capital city: Luanda

Population: 28.8 million (2016; source: UN)

Currency: Kwanza (AOA)

Unfavourable developments in the international oil price continued to stifle the Angolan economy during 2016. The economic slowdown continued, with no output growth in 2016. Inflationary pressures intensified over the last year, largely as a result of the depreciation of the kwanza. The economy showed deficits in the public and external accounts despite the contraction in imports of goods and services and in current expenditures.


The stabilisation of the international oil price at around USD 50 per barrel, significantly below the prices of 2011 to mid 2014, when they exceeded USD 100, continued to stifle the economy in Angola during 2016. The economy's high dependence on the oil sector, which accounted for around 40% of GDP in the years before the current shock, exposes economic performance strongly to that commodity's price, as was the case in 2008-2009.

The slowdown that began in 2014 has continued, with no output growth in 2016. The oil sector only grew by 0.8%, which compares to 6.4% in 2015. The non-oil economy performed negatively (-0.4%), with the industrial, construction and services sectors continuing to adjust to a context of lower private consumption and public investment. The difficulty in accessing foreign currencies led to declines in the supply of imported inputs used in the manufacturing process, considerably limiting the scope for import substitution. Projections for 2017 suggest economic growth of 1.3%, driven by the increase in public spending and an improvement in the terms of trade.

The ongoing deterioration of economic conditions placed the kwanza under strong downward pressure, with the currency falling 41% against the US dollar and 28% against the euro between July 2014 and April 2016, when the Angolan authorities repegged the exchange rate to the US dollar, after it had been abandoned in the second half of 2014. However, despite the gradual devaluation of the official exchange rate up to April 2016, it has continued to differ significantly from the parallel market exchange rate, with a spread estimated at 190% in November 2016 by the International Monetary Fund (IMF).

The combined effect of the kwanza's devaluation, the increase in fuel prices – following the removal of the energy subsidies – and the accommodative monetary conditions in the first half of 2016, have contributed to a sharp acceleration in the inflationary pace, with inflation reaching 41.9% in 2016, from 14.3% in 2015. The inflation rate has shown signs of slowing down in the first half of 2017, falling 10 percentage points versus the first half of 2016, driven in part by the stabilisation of the exchange rate against the US dollar (the kwanza's peg to the dollar had already been decisive in the economy's nominal stabilisation process from mid-2011).

The Angolan economy had twin deficits, for the third year in succession. The external current account improved in 2016, but stayed negative (-4.3% of GDP). Crude oil exports, which represent around 90% of total exports, fell again in 2016 (-17.9% on 2015), now accounting for less than half of the value exported in 2014. This decline in value of external sales led to a necessary adjustment in goods and services imports, which fell by 30% in 2016. In parallel, capital inflows into Angola during 2016 (worth 0.3% of GDP) proved insufficient to finance the current account deficit, leaving the remainder (4% of GDP) to be covered by official foreign exchange reserves. A new deterioration is expected in the external accounts in 2017, with a current account deficit projected of 6.1% of GDP.

Another of the main transmission mechanisms of the oil price shock to the Angolan economy came via the public finances, whose equilibrium depends heavily on the collection of taxes related to the oil industry (despite their share of total public revenue falling sharply, they nevertheless accounted for nearly half the total in 2016). For the third year in succession, the fiscal balance was negative in the year in review (-4.1% of GDP, deteriorating 0.8 percentage points from 2015). The 21.1% decline in oil revenue was the main factor explaining the fiscal position's deterioration in 2016, despite the containment of current expenditures. The State's General Budget for 2017 projects a new intensification in the deficit, expected to come to 5.7% of GDP.

The rising trend of public debt continued in 2016, reaching 71.9% of GDP at the end of the year (6.4 percentage points higher than in 2015), according to the IMF's most recent data. External debt has followed this trend, with a 7.2 percentage point estimated increase, bringing total external debt to 42.6% of GDP.

Repercussions of the economic slowdown have also spread to the financial system. The level of non-performing loans continues to increase, reaching 13.1% of total credit at the end of 2016, largely reflecting the corporate sector's greater difficulties in servicing its debt. Solvency levels among the financial institutions have also shown a gradual deterioration, with five banks having insufficient capital in September 2016. Developments in the solvency ratios may

15

however not yet fully reflect the deterioration in asset quality, given that certain loan restructuring operations have been extended to non-viable companies (source: IMF). Despite these less positive developments, the sector's profitability has recovered since 2014 and the dollarisation level in the banking system seems to have stabilised more recently at around 30% of assets and liabilities.

The external competitiveness gains achieved in 2015, in real terms, were reversed in 2016, as a result of the significant spreads between Angola's inflation and that of its main trading partners. Despite the 14.4% fall in the nominal effective exchange rate index (EERI), which was due to the depreciation of the kwanza against the currencies

of Angola's main trading partners, the real EERI appreciated 19.1% in 2016, particularly from April, when the price of the kwanza stabilised against the US dollar.

Broad money expanded in 2016 at a pace near that of the last few years (expansion of 14.1%). However, the main liquidity expansion/contraction factors changed compared to the year before, with credit to the economy falling and general government financing becoming one of the key drivers of broad money expansion. The increased value in kwanzas of the foreign exchange reserves, despite the reduction in their US dollar value, was the main liquidity expansion factor in 2016.

Table 2.1 • Main economic indicators2013 2014 2015 2016 2017

Est. Est. Est. Est. Proj.

Real GDP (annual % change) 6.8 4.8 3.0 0.0 1.3

7.7 7.5 14.3 41.9 15.8

13.2 16.2 11.8 14.1 –

6.7 -3.0 -10.0 -4.3 -6.1

0.3 -6.6 -3.3 -4.1 -5.7

22.6 28.4 35.3 42.6 –

Inflation (year-on-year % change)

Broad money (annual % change)

Current account (% of GDP)

Fiscal balance (% of GDP)

External public debt (% of GDP)

Sources (for the subsequent charts also): Banco Nacional de Angola, Ministry of Finance of Angola, European Central Bank, International Monetary Fund and Organisation for Economic Co-operation and Development.

Angola


Chart 2.1 • Real GDP Annual % change

Chart 2.2 • Inflation Annual % change in the CPI

2.43.4 3.9

5.2

6.8

4.8

3.0

0.01.3

0

2

4

6

8

10

2009 2010 2011 2012 2013 2014 2015(est.)

2016(est.)

2017(proj.)

0

10

20

30

40

50

2009 2010 2011 2012 2013 2014 2015 2016 2017Year-on-year % change Average % change

The stabilisation of the oil price at levels considerably below those of 2014 continues to stifle economic activity in Angola.

The upward trend of inflation intensified in 2016, reflecting the devaluation of the kwanza, increased fuel prices and accommodative monetary conditions in the first half of the year. By the end of 2016, inflation reached its highest level for a decade.

Chart 2.3 • External accounts % of GDP, average oil price per barrel in USD

Chart 2.4 • External public debt and foreign exchange reserves USD billions

-40

0

40

80

120

-20%

0%

20%

40%

60%

2009 2011 2013 2015(est.)

2017(proj.)

Trade balance Current accountOverall balance Avg. oil price per barrel (Brent)

0

10

20

30

40

50

2009 2010 2011 2012 2013 2014(est.)

2015(est.)

2016(est.)

Total external debt Gross foreign exchange reservesTotal external debt (% of GDP)

The external deficit fell by more than half in 2016, with imports falling in a context of increased difficulty in accessing foreign currencies. Although the impact of the oil price shock had been greater in 2015, the average price per barrel of Angolan oil fell 19% in 2016.

External debt has continued to increase, reaching 43% of GDP. The level of foreign exchange reserves stabilised, largely as a result of the decision by the authorities to allow the kwanza to devalue.

Chart 2.5 • Crude oil exportsDestinations as a percentage, total in USD billions

Chart 2.6 • Goods imports Origins as a percentage, total in USD millions

0

15

30

45

60

75

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015

China United States IndiaCanada Other Total

0

10

20

30

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015Portugal China United StatesBelgium Other Total

The geographical distribution of exports has remained relatively stable. External sales of crude oil, the main source of foreign currency, fell 17.9% in 2016, totalling USD 25.8 billion.

China replaced Portugal as the main supplier of goods in 2015. The value of imports of goods fell again in 2016, now representing half the value of the goods acquired from abroad in 2014.

17

Chart 2.7 • Public revenue % of GDP

Chart 2.8 • Public expenditure % of GDP

0

10

20

30

40

50

2009 2011 2013 2015(est.)

2017(budg.)

Oil revenue Other tax revenue Non-tax revenue

0

10

20

30

40

50

2009 2011 2013 2015(est.)

2017(budg.)

Compensation of employees Goods and services Interest Transfers Investment

Public revenue fell 8.7% in 2016, driven above all by the 21.1% fall in oil revenue. This component now accounts for less than half of total public revenue.

Public expenditure continued to fall in 2016, mainly due to the falling trend in goods and services spending. Offsetting this was the increase in interest charges on public debt, equating to 2.9% of GDP in 2016.

Chart 2.9 • Public accounts % of GDP

Chart 2.10 • Financial stability indicators

-10-505

101520

2009 2011 2013 2015(est.)

2017(budg.)

Current balance Overall balance

-5%5%

15%25%35%

Capital adequacy

Tier 1 ratio

Non-performingloans to total

credit

NLP net of provisions(% core capital)

Return on equity

Return on assets

2012 2014 2016

The public finances closed the 2016 financial year in negative territory for the third year in succession, with the deficit as a percentage of GDP increasing by 0.8 percentage points. The State's General Budget for 2017 projects a new intensification in the public deficit.

The challenging economic and financial context the country faces is reflected in the deterioration of the financial stability indicators, with certain financial institutions requiring recapitalisations.

Chart 2.11 • Liquidity expansion/contraction factors Changes in % of initial stock of broad money

Chart 2.12 • Effective exchange rateIndexes: 100 = 2000, monthly averages

-40-200

20406080

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(May)

(Net) foreign assets (Net) claims on gen. gov.Credit to the economy Other (net) domestic assetsBroad money

225

250

275

300

325

350

5

7

9

11

13

2009 2010 2011 2012 2013 2014 2015 2016 2017Nominal index (left-hand scale) Real index (right-hand scale)

(appreciation: +; depreciation: -).

Broad money expanded in 2016 at a pace near that of the last few years. The increased value in the foreign exchange reserves (expressed in kwanzas) and increased credit to the Government were the main liquidity expansion factors in 2016.

Despite the devaluation of the kwanza in 2016, the spiking general price level resulted in the Angolan economy losing external competitiveness significantly, in real terms.

Angola


Table 2.2 • Economic indicators

2012 2013 2014 2015 2016 2017

Est. Est. Est. Est. Proj. Est. Proj. Est.

Output and pricesNominal GDP AOA billions 11,011 12,056 12,462 12,323 13,786 15,729 20,072 –

89.7 94.0 95.3 92.4 – 86.8 – –

115.4 124.9 126.7 102.7 81.5 96.1 121.0 –

5.2 6.8 4.8 3.0 1.3 0.0 1.3 –

4.5 -1.1 -2.6 6.4 – 0.8 1.5 –

5.5 10.9 8.2 1.6 – -0.4 1.3 –

9.0 7.7 7.5 14.3 [11.0-13.0] 41.9 15.8 31.9 June

10.3 8.8 7.3 10.3 – 32.4 – 37.8 June

45.9 40.2 35.3 27.3 25.5 19.5 18.3 –

37.3 30.1 23.8 15.4 12.3 9.5 8.4 –

39.3 39.9 41.9 30.6 31.2 23.6 24.0 –

28.9 28.5 29.4 24.6 25.2 19.1 19.0 –

10.4 11.4 12.5 6.0 5.9 4.5 5.0 –

6.6 0.3 -6.6 -3.3 -5.7 -4.1 -5.7 –

9.2 3.0 -2.4 -2.2 -5.7 -4.1 -5.7 –

8.2 -1.2 -1.1 15.8 – 11.3 – -14.8 May

23.9 10.5 0.7 17.7 – -0.9 – -1.9 May

5.7 13.2 16.2 11.8 – 14.1 – -3.4 May

15.3 15.1 17.4 15.4 – 15.8 – 15.7 May

3.8 3.9 4.4 5.2 – 5.2 – 6.2 May

2.4 2.3 2.1 2.5 – 2.1 – 2.2 May

18.3 19.5 19.8 19.8 – 19.2 – –

6.8 9.8 11.7 11.6 – 13.1 – –

12.5 10.9 4.9 12.9 – 15.6 – –

5.6 -3.2 -12.5 -43.4 -15.3 -16.9 14.3 –

4.4 7.3 8.8 -29.1 -5.5 -30.0 25.2 –

41.0 33.5 24.1 12.2 9.5 14.0 11.6 –

12.0 6.7 -3.0 -10.0 -14.9 -4.3 -6.1 –

32.2 32.2 27.9 24.4 – 24.4 – 21.6 May

17.6 21.2 27.0 32.7 – 37.0 – –

22.6 28.2 35.9 36.3 – 40.9 – –

19.6 22.6 28.4 35.3 – 42.6 – –

122.7 128.2 130.7 133.3 – – – –

95.4 96.5 98.3 120.0 – 163.7 – 165.9 June

-0.9 -2.4 -2.0 -21.0 – -14.4 – -2.3 June

4.6 2.1 3.7 -11.3 – 19.1 – 9.6 June

EUR billions

USD billions

Real GDP Annual % change

Oil sector Annual % change

Other sectors Annual % change

Inflation (CPI-Luanda) Year-on-year % changeAverage annual % change

Public finances

Total revenue % of GDP

Oil revenue % of GDP

Total expenditure % of GDP

Current expenditure % of GDP

Capital expenditure % of GDP

Overall balance (commitment basis) % of GDP

Overall balance (cash basis) % of GDP

Money and credit

Net foreign assets Annual % change

Credit to the economy Annual % change

Broad money (M3) Annual % change

Interest rates

Credit in national currency(a) (180 d) Annual rate

Deposits in national currency (180 d)

Annual rate

Deposits in foreign currency (180 d) Annual rate

Financial stability

Capital adequacy Percentage

Non-performing loans/total loans % of total loans

Return on equity Percentage

Balance of paymentsExports (current USD) Annual % change

Imports (current USD) Annual % change

Trade balance % of GDP

Current account % of GDP

Foreign reserves (gross) USD billions

External public debtTotal external public debt EUR billions

USD billions

% of GDP

Exchange rates

Bilateral rate EUR/AOA Average rate

Bilateral rate USD/AOA Average rate

Nominal EERI [appreciation: +](b) Annual % change

Real EERI [appreciation: +](b) Annual % change

Sources: Banco Nacional de Angola, Ministry of Finance of Angola, European Central Bank, International Monetary Fund, Organisation for Economic Co-operation and Development and Banco de Portugal calculations.Notes: (a) Credit granted to enterprises. (b) Effective exchange rate index (EERI), calculated on the basis of exchange rates applied to the currencies of the four major trading partners over the 2010/14 period.

19

Table 2.3 • Gross domestic productCurrent prices, AOA billions

2012 2013 20142015 2016 2017

Est. Proj. Est. Proj.

Agriculture 776 1,195 1,410 1,623 1,871 – –

27 30 38 47 48 – –

89 95 81 121 146 – –

5,160 5,018 4,414 2,958 3,283 – –

752 884 1,012 1,132 1,324 – –

947 1,109 1,267 1,499 1,673 – –

14 20 25 29 41 – –

2,428 2,813 3,215 3,755 4,147 – –

819 892 1,001 1,157 1,253 – –

11,011 12,056 12,462 12,323 13,786 15,729 20,072

89.7 94.0 95.3 92.4 – 86.8 –

115.4 124.9 126.7 102.7 81.5 96.1 121.0

12.6 9.5 3.4 -1.1 11.9 27.6 27.6

5.2 6.8 4.8 3.0 1.3 0.0 1.3

4.5 -1.1 -2.6 6.4 – 0.8 1.5

5.5 10.9 8.2 1.6 – -0.4 1.3

Fishing and related products

Diamonds and other

Oil

Manufacturing

Construction

Energy

Market services

Other

Gross domestic product (market prices)

Memo items:

Nominal GDPmp (EUR billions)

Nominal GDPmp (USD billions)

Nominal GDPmp (AOA, annual % change)

Real GDP (annual % change)

Oil sector

Other sectors

Sources: Banco Nacional de Angola, International Monetary Fund and Banco de Portugal calculations.

Angola


Table 2.4 • Consumer price indexPer cent

Monthly change Cumulative change Year-on-year change Average change

[1] [2] [3] [4]

2003 December2004 December2005 December

2006 December

2007 December

2008 December

2009 December

2010 December

2011 December

2012 December

2013 December

2014 December

2015 December

2016 December

2015 January

February

March

April

May

June

July

August

September

October

November

December

December (proj.)

2016 January

February

March

April

May

June

July

August

September

October

November

December

December (proj.)

2017 January

February

March

April

May

June

December (proj.)

Sources: Banco Nacional de Angola, International Monetary Fund and Banco de Portugal calculations.Notes: [1] month (n) / month (n-1); [2] month (n) / previous December; [3] month (n) / month (n) of the previous year; [4] last 12 months / previous 12 months.

– 76.6 76.6 98.2– 31.0 31.0 43.5

– 18.5 18.5 23.0

– 12.2 12.2 13.3

– 11.7 11.7 12.2

– 13.2 13.2 12.5

– 14.0 14.0 13.7

– 15.3 15.3 14.5

– 11.4 11.4 13.5

– 9.0 9.0 10.3

– 7.7 7.7 8.8

– 7.5 7.5 7.3

– 14.3 14.3 10.3

– 41.9 41.9 32.4

0.7 0.7 7.4 7.2

0.8 1.5 7.7 7.3

0.6 2.1 7.9 7.3

0.9 3.0 8.2 7.4

1.2 4.2 8.9 7.6

1.3 5.5 9.6 7.8

1.3 7.0 10.4 8.1

1.1 8.2 11.0 8.4

1.2 9.5 11.7 8.8

1.4 11.0 12.4 9.2

1.3 12.5 13.3 9.7

1.6 14.3 14.3 10.3

– – 9.0 –

3.4 3.4 17.3 11.1

3.3 6.8 20.3 12.2

3.4 10.5 23.6 13.5

3.1 13.9 26.4 15.0

3.5 17.9 29.2 16.8

3.3 21.7 31.8 18.7

4.0 26.7 35.3 20.8

3.3 30.8 38.2 23.1

2.1 33.6 39.4 25.4

1.8 36.0 40.0 27.8

2.1 38.9 41.1 30.1

2.2 41.9 41.9 32.4

– – [11.0-13.0] –

2.3 2.3 40.4 34.3

2.6 4.9 39.4 35.8

2.2 7.3 37.8 37.0

2.0 9.4 36.3 37.7

1.8 11.4 34.1 38.0

1.6 13.1 31.9 37.8

– – 15.8 –

21

Table 2.5 • Balance of paymentsUSD millions

2012 2013 2014 20152016 2017

Proj. Est. Proj.

Current account 13,853 8,348 -3,748 -10,273 -12,130 -4,101 -7,428

47,376 41,903 30,590 12,488 7,738 13,433 13,986

71,093 68,247 59,170 33,181 27,550 27,466 31,580

69,716 66,902 57,642 31,895 25,864 26,210 30,220

68,871 65,611 56,364 31,394 – 25,784 29,725

1,159 1,167 1,335 1,066 – 1,058 1,132

218 177 193 220 – 198 228

-23,717 -26,344 -28,580 -20,693 -19,811 -14,033 -17,594

-31,761 -31,430 -32,126 -21,928 -18,906 -16,763 -20,441

-21,339 -21,530 -23,276 -16,020 -14,430 -11,390 -14,550

780 1,316 1,681 1,256 1,621 1,156 1,139

-22,119 -22,846 -24,958 -17,276 -16,051 -12,546 -15,689

-4,595 -4,924 -5,628 -4,204 – – –

-6,230 -5,049 -6,673 -3,107 – – –

-8,908 -9,265 -10,050 -7,185 – – –

-10,422 -9,900 -8,850 -5,908 -4,476 -5,373 -5,891

-662 -1,090 -1,066 -1,287 -988 – –

-9,722 -9,331 -7,850 -4,292 -3,621 – –

-1,762 -2,124 -2,211 -834 -963 -771 -973

-8,885 -8,203 -486 6,908 6,511 252 4,4281 0 2 6 0 0 0

-9,639 -13,164 -2,331 8,235 7,121 -3,362 641

753 4,961 1,844 -1,334 -611 3,614 3,787

-462 199 336 354 0 0 0

4,506 344 -3,896 -3,010 -5,619 -3,850 -3,000

-4,506 -344 3,896 3,010 – 3,850 3,000

-4,505 -344 -3,896 3,010 – 3,850 3,000

-1 0 0 0 – 0 0

0 0 0 0 – 0 0

41.0 33.5 24.1 12.2 9.5 14.0 11.6

12.0 6.7 -3.0 -10.0 -14.9 -4.3 -6.1

Trade balance

Exports (f.o.b.)

Oil sector

of which: Crude oil

Diamonds

Other

Imports (f.o.b.)

Services and income

Services (net)

Credit

Debit

of which: Transportation and travel

Construction

Technical assistance

Income (net)

of which: Interest on public debt

Dividends and profits

Current transfers (net)

Capital and financial accountsCapital transfers (net)

Foreign direct investment (net)

Other net capital

Errors and omissions

Overall balance

FinancingChange in official reserves (increase: - )

Exceptional financing(a)

Financing gap

Memo items:

Trade balance (% of GDP)


Sources: Banco Nacional de Angola, Ministry of Finance of Angola, International Monetary Fund and Banco de Portugal calculations.Notes: (a) Mainly, change in arrears and debt forgiveness or rescheduling .

Angola


Table 2.6 • Goods exportsProducts, USD millions | Destinations, % of total

2010 2011 2012 2013 20142015 2016 2010

a 2015

Est. Est. Est.

Total exports

Crude oilRefined oil products and gas

Diamonds

Other

Exports by destination(a)

Canada

China

France

India

Portugal

South Africa

Taiwan

United States

Other

Sources: Banco Nacional de Angola, International Monetary Fund and Banco de Portugal calculations.Note: (a) Crude oil exports only.

Table 2.7 • Goods importsProducts, USD millions | Origins, % of total

2010 2011 2012 2013 20142015 2016 2010

a 2015

Est. Est. Est.

Total imports 16,667 20,228 23,717 26,344 28,580 20,693 14,033 –

16,667 20,228 23,717 26,344 28,587 20,052 – –

7.3 6.0 6.7 5.5 6.0 6.6 – 6.3

5.1 4.2 4.4 4.3 4.4 4.0 – 4.4

8.5 7.6 9.2 10.1 12.2 14.3 – 10.4

14.5 15.4 16.4 16.4 15.3 13.1 – 15.3

4.0 3.8 3.8 3.7 3.6 3.8 – 3.8

5.1 2.9 2.4 3.4 4.0 3.2 – 3.5

7.4 8.2 5.5 4.7 6.8 6.5 – 6.4

48.1 52.0 51.7 51.8 47.7 48.6 – 50.0

of which: SNA(a)

Imports by originBelgium

Brazil

China

Portugal

South Africa

United Kingdom

United States

Other

Sources: Banco Nacional de Angola, International Monetary Fund and Banco de Portugal calculations.Note: (a) Data from the National Customs Service of Angola.

50,595 67,310 71,093 68,247 59,170 33,181 27,466 –

48,629 64,539 68,871 65,611 56,364 31,394 25,784 –

722 1,052 845 1,291 1,278 501 426 –

976 1,205 1,159 1,167 1,335 1,066 1,058 –

267 514 218 177 193 220 198 –

5.8 8.7 5.0 5.0 4.6 3.3 – 5.6

42.8 37.7 49.6 48.3 48.5 44.8 – 45.4

3.7 3.2 1.6 2.0 3.5 5.0 – 2.9

10.1 10.7 10.1 10.3 8.3 8.5 – 9.8

1.8 2.4 2.5 4.7 3.4 3.8 – 3.1

3.1 2.6 4.2 2.7 3.4 4.3 – 3.3

4.8 8.2 6.1 5.3 4.6 4.5 – 5.8

18.1 15.9 8.7 7.0 3.5 3.1 – 9.7

9.8 10.6 12.2 14.6 20.1 22.7 – 14.3

23

Table 2.8 • External public debt and foreign exchange reservesUSD millions

2012 2013 20142015 2016

Est. Est.

1. Net foreign assets 32,937 31,941 30,191 26,386 23,952

32,166 32,231 27,948 24,420 24,438

22,583 28,178 35,933 36,279 40,900

13,786 18,143 26,474 26,612 –

12,813 16,590 24,005 23,345 –

974 1,553 2,470 3,267 –

6978 8,433 7,788 7,906 –

1,813 1,598 1,666 1,756 –

6 4 4 4 –

28.5 25.6 23.8 25.7 24.9

27.9 25.8 22.1 23.8 25.4

19.6 22.6 28.4 35.3 42.6

of which: Foreign exchange reserves (gross)

2. External public debt (including arrears)

Commercial

Banking

Enterprises

Official bilateral

Official multilateral

Fees

Memo items:

Net foreign assets (% of GDP)

Gross foreign exchange reserves (% of GDP)

Total external debt (% of GDP)

Sources: Banco Nacional de Angola, International Monetary Fund and Banco de Portugal calculations.

Angola


Table 2.9 • Government operationsAOA billions

2012 2013 20142015 2016 2017

Est. Budg. Est. l.e.(a) Budg.

1. Total revenue 5,054 4,849 4,403 3,367 3,515 3,075 87.5 3,6684,826 4,602 4,098 3,042 3,235 2,762 85.4 3,404

4,103 3,630 2,970 1,898 1,690 1,498 88.7 1,695

723 972 1,128 1,144 1,545 1,264 81.8 1,709

226 245 303 324 279 312 111.7 264

2 2 2 1 0 1 – 0

4,329 4,816 5,222 3,774 4,296 3,718 86.6 4,8083,184 3,437 3,667 3,038 3,480 3,009 86.5 3,813

1,031 1,155 1,319 1,390 1,497 1,496 99.9 1,614

1,297 1,228 1,248 787 995 510 51.2 1,035

105 99 150 249 307 463 150.7 484

68 59 88 143 152 186 122.1 262

37 40 62 106 155 277 178.7 222

752 955 950 612 680 540 79.4 680

1,145 1,379 1,555 736 816 709 86.9 995

725 32 -819 -407 -781 -643–

-1,140

289 324 517 138 0 0 – 0289 324 – – 0 – – 0

0 0 – – 0 – – 0

1,014 356 -302 -269 -781 -644 – -1,140

-1,014 -356 302 269 781 644 – 1,140218 183 438 241 1,059 653 – 990

384 380 732 579 1,518 1,400 – 1,564

-166 -197 -294 -338 -459 -747 – -575

-1,231 -539 -136 29 -278 -9 – 150

-432 -597 – – – – – –

-800 58 – – – – – –

6.6 0.3 -6.6 -3.3 -5.7 -4.1 – -5.7

Tax revenue

Oil revenue

Non-oil revenue

Non-tax revenue

Grants

2. Total expenditureCurrent expenditure

Compensation of employees

Goods and services

Debt interest

Domestic

External

Transfers and subsidies

Capital expenditure

3. Overall balance (commitment basis) [ 1. - 2. ]

4. Change in arrears (net)Domestic(b)

External interest

5. Overall balance (cash basis) [ 3. + 4. ]

6. FinancingExternal financing (net)

Disbursements

Amortisation

Domestic financing (net)

Bank financing

Non-bank financing (incl. errors and omissions)

Memo item:

Overall balance, commitment basis (% of GDP)

Sources: Banco Nacional de Angola, Ministry of Finance of Angola, International Monetary Fund and Banco de Portugal calculations.Notes: (a) Level of budget execution (%). (b) Net of changes in arrears to suppliers (expenditure) and changes in Sonangol's arrears to the Treasury (revenue).

25

Table 2.10 • Monetary surveyAOA billions

2012 2013 2014 20152016 2016/2015 2017 May 2017/2016

Est. [1] [2] May [1] [2]

Net foreign assets

USD billions

Banco Nacional de Angola

Net international reserves

Gross reserves

USD billions

Short-term liabilities

Other foreign assets (net)

Commercial banks

Net domestic assetsDomestic credit (net)

Claims on general government (net)Credit to the economy

Other domestic assets (net)

Total assets

Broad money (M3)

Money and quasi-money (M2)

Money

Currency in circulation

Demand deposits

in national currency

in foreign currency

Quasi-money

Time deposits in national currencyTime deposits in foreign currency

Other financial instruments

Sources: Banco Nacional de Angola, International Monetary Fund and Banco de Portugal calculations.Notes: [1] Percentage changes from the end of the previous year. [2] Changes in % of initial stock of broad money (liquidity expansion/contraction factors)..

3,155 3,116 3,082 3,570 3,974 11.3 7.1 3,385 -14.8 -9.0

33 32 30 26 24 -9.2 – 20 -14.8 –

3,017 3,097 2,889 3,361 3,637 8.2 4.8 3,070 -15.6 -8.7

2,954 3,041 2,788 3,284 3,550 8.1 4.7 2,991 -15.8 -8.6

3,081 3,145 2,853 3,304 4,054 22.7 13.1 3,579 -11.7 -7.3

32 32 28 24 24 0.1 – 22 -11.7 –

-127 -103 -66 -21 -504 – -8.5 -589 16.7 -1.3

63 56 102 78 87 12.0 0.2 80 -8.3 -0.1

138 19 193 209 337 60.8 2.2 314 -6.6 -0.3

728 1,280 2,028 2,141 2,545 18.8 7.1 2,915 14.6 5.7

1,705 2,260 3,016 3,821 4,520 18.3 12.2 4,939 9.3 6.4

-943 -666 69 352 1,083 207.9 12.8 1,567 44.7 7.4

2,648 2,926 2,947 3,469 3,437 -0.9 -0.6 3,372 -1.9 -1.0

-977 -980 -988 -1,680 -1,975 17.6 -5.2 -2,024 2.5 -0.8

3,883 4,397 5,110 5,712 6,519 14.1 – 6,300 -3.4 –

3,883 4,397 5,110 5,712 6,519 14.1 – 6,300 -3.4 –

3,749 4,395 5,103 5,704 6,516 14.2 – 6,297 -3.4 –

2,272 2,585 3,097 3,420 3,845 12.4 – 3,608 -6.2 –

244 276 340 381 386 1.4 – 345 -10.8 –

2,028 2,309 2,757 3,039 3,459 13.8 – 3,264 -5.6 –

1,062 1,470 1,905 2,264 2,576 13.8 – 2,428 -5.7 –

966 839 852 775 883 13.9 – 835 -5.4 –

1,477 1,810 2,007 2,284 2,671 16.9 – 2,689 0.7 –

721 902 1,167 1,258 1,553 23.5 – 1,553 -0.0 –

756 908 840 1,026 1,118 9.0 – 1,136 1.6 –

134 2 7 8 4 -53.4 – 3 -12.7 –

Angola


Table 2.11 • Interest ratesAnnual rates, per cent

2012 2013 2014 2015 2016 2017

Dec. Dec. Dec. Dec. Mar. Jun. Sep. Dec. Mar. May

Deposits

(in national currency)

Demand deposits 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

3.1 3.5 3.5 5.0 5.1 5.4 5.6 6.8 6.0 6.4

3.8 3.9 4.4 5.2 5.0 4.8 5.0 5.2 5.2 6.1

4.8 5.8 4.5 3.9 3.8 4.1 4.0 3.9 3.9 3.9

6.7 4.9 5.2 4.6 5.0 5.0 5.1 4.8 4.9 5.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

1.8 2.0 1.9 2.3 2.0 2.0 2.0 2.0 2.1 2.1

2.4 2.3 2.1 2.5 2.4 2.3 2.4 2.1 2.1 2.2

2.8 2.8 2.6 3.1 3.1 2.9 3.2 2.9 2.9 2.9

3.5 5.0 2.6 4.6 4.8 4.9 4.9 4.8 4.9 4.8

15.3 15.0 17.3 15.4 15.6 15.8 15.8 15.8 15.4 15.6

14.3 13.8 13.8 15.2 15.2 15.1 15.1 19.7 15.3 15.6

15.0 13.1 13.6 14.8 14.0 14.6 14.9 15.1 15.4 16.4

8.9 11.8 11.4 10.0 16.2 16.6 20.0 0.0 9.9 6.7

11.5 12.1 10.6 13.0 – – 11.6 8.4 6.7 6.7

11.3 9.8 10.0 9.8 8.4 7.9 8.5 8.7 9.0 8.8

20.0 10.3 9.8 15.0 15.0 16.0 20.0 20.0 20.0 20.0

10.2 9.2 9.0 11.0 14.0 16.0 16.0 16.0 16.0 16.0

11.5 10.3 9.8 12.5 16.0 20.0 20.0 20.0 20.0 20.0

1.5 0.8 1.8 0.0 2.3 2.3 7.3 0.0 0.0 0.0

6.2 4.7 6.1 11.3 11.0 13.9 14.5 23.4 23.7 22.4

9.0 7.7 7.5 14.3 23.6 31.8 39.4 41.9 37.8 34.1

Time deposits

Up to 90 days

91-180 days

181-365 days

Over 1 year

(in foreign currency)

Demand deposits

Time deposits

Up to 90 days

91-180 days

181-365 days

Over 1 year

Credit (to enterprises)

(in national currency)

Up to 180 days

181-365 days

Over 1 year

(in foreign currency)

Up to 180 days

181-365 days

Over 1 year

BNA intervention rates

Rediscount

Reference rate

Standing facilities

Liquidity provision facility

Overnight deposit facility

LUIBOR(a) overnight

Memo item:Inflation (y-o-y % change)

Source: Banco Nacional de Angola.Notes: (a) Luanda Interbank Offered Rate (weighted average rate of liquidity-providing operations without collateral, applied by banks in the interbank money market).

27

Table 2.12 • Financial stability indicatorsPer cent

2012 2013 2014 2015 2016

Dec. Dec. Dec. Dec. Dec.

SolvencyCapital adequacy

Tier 1 ratio

Credit risk

Non-performing loans to total loans

Non-performing loans net of provisions (% of core capital)

Credit in foreign currency (% of total credit)

Profitability

Return on equity

Return on assets

Liquidity risk

Loan-to-deposit ratio

Liquid assets/total assets

Foreign currency-denominated liabilities/total liabilities

Sources: Banco Nacional de Angola and International Monetary Fund.

18.3 19.5 19.8 19.8 19.2

13.6 14.3 13.9 13.8 14.3

6.8 9.8 11.7 11.6 13.1

11.6 22.3 32.8 19.6 27.4

42.7 37.8 27.4 30.8 29.5

12.5 10.9 4.9 12.9 15.6

1.6 1.4 0.6 1.7 2.2

65.5 63.3 59.9 59.0 51.6

26.3 30.1 33.9 39.7 46.3

50.7 43.0 33.1 33.5 34.4

Angola


Table 2.13 • Exchange ratesAverage rates

EERI(a) Index: 100 = 2000

EUR/AOA USD/AOA Nominal Real

2003200420052006200720082009201020112012201320142015

2016

2015 JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

2016 JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

2017 JanuaryFebruaryMarchAprilMayJune

Sources: Banco Nacional de Angola, European Central Bank, Organisation for Economic Co-operation and Development and Banco de Portugal calculations.Note: (a) Effective exchange rate index, calculated on the basis of official exchange rates applied to the currencies of the four main trading partners over the 2010/14 period. An increase/decrease in the EERI (nominal or real) corresponds to an appreciation/depreciation of the kwanza.

86.1 74.3 13.3 133.7104.3 83.4 11.9 165.4108.4 87.2 11.3 189.3101.2 80.4 12.1 222.7105.4 76.7 12.0 238.7110.8 75.0 11.6 245.3111.2 79.6 11.1 264.6121.3 92.0 9.6 252.2130.6 93.8 9.1 256.7122.7 95.4 9.0 272.3128.2 96.5 8.8 281.8130.7 98.3 8.7 292.0

133.3 120.0 7.4 270.1

– 163.7 5.7 267.3

121.4 103.6 8.4 292.8119.4 105.2 8.4 291.8116.2 107.1 8.3 289.5117.6 109.0 8.1 286.4122.5 109.7 8.0 287.0132.2 117.5 7.5 270.3137.3 124.7 7.1 258.6139.8 125.8 7.1 262.7148.5 131.8 6.8 253.1152.1 135.3 6.6 249.9145.6 135.3 6.7 255.2147.2 135.3 6.7 261.2169.2 155.6 5.9 237.2175.3 157.6 5.8 238.7178.1 159.4 5.7 241.7183.3 164.2 5.5 241.7

– 165.9 5.5 249.0– 165.9 5.6 258.8– 165.9 5.6 271.4– 165.9 5.6 279.0– 165.9 5.6 284.0– 165.9 5.6 291.0– 165.9 5.7 301.5– 165.9 5.8 311.0– 165.9 5.8 315.2– 165.9 5.7 322.1– 165.9 5.7 329.0– 165.9 5.7 333.9– 165.9 5.7 338.1– 165.9 5.6 340.8

2.2. Cabo Verde Área: 4,033 Km2

Capital city: Praia

Population: 531 thousand (2016; source: Cabo Verde National Institute of Statistics)

Currency: CV Escudo (CVE)

Domestic demand dynamics and the good performance of tourism and foreign direct investment led to an acceleration in economic growth in Cabo Verde in 2016. The ensuing sound tax collection and lower costs arising from the public investment programme resulted in a decline in the fiscal deficit, but failed to prevent the further increase in public debt. The current account deficit fell, due to the ongoing increase in both exports of services and private transfers. Foreign direct investment inflows, disbursements of foreign public loans and the unwinding of investments abroad funded the current deficit and facilitated an expansion in foreign exchange reserves. Due to the inflow of reserves and moderate inflation, the central bank was able to maintain an accommodative monetary policy in 2016, in order to foster credit to the economy.


In 2016 there was an acceleration in economic growth in Cabo Verde, to 3.8% (1.0% in 2015), furthered by buoyant domestic demand (mainly consumption but also investment) and the sound performance of tourism revenue and foreign direct investment.

The increase in private transfers, including emigrants’ remittances, together with the ongoing recovery in tourism demand (particularly from Italy, the United Kingdom and France), led to a reduction in the current account deficit, to 3.9% of GDP (4.6% in 2015). This improvement also benefited from a decrease in the income account deficit by virtue of the increase in inflows partly driven by remuneration of non-resident employees. The acceleration in economic activity boosted imports of both consumer and capital goods, which resulted in the worsening of the trade balance.

The current account deficit was funded by foreign direct investment inflows, disbursements of foreign public loans and the unwinding of investments abroad by the banking and non-banking sectors. Currency inflows also strengthened foreign exchange reserves, by EUR 88 million, rising to 6.9 months of goods and services imports, thus helping support the exchange rate peg with the euro in place since 1998.

The increase in foreign exchange reserves was accompanied by higher net domestic credit, combining increases chiefly in credit to the non-financial private sector, households and general government. As such, broad money accelerated in 2016, growing by 8.4% from 2015, as reflected mainly by the collection of CVE-denominated deposits (mostly, demand deposits but also time deposits) and emigrants’ deposits (albeit at a slower pace than before).

Price levels continued on a downward path in 2016, reflecting external price developments (mostly, oil products and products from euro area countries), greater domestic production of fresh produce and a reduction in the VAT rate (reversal of the 2015 tax increase in aid of Chã das Caldeiras). Inflation remained at negative levels throughout 2016, standing at -1.4% and

0.3% in December, in average and year-on-year terms respectively.

Against a background of well-performing reserves and controlled inflation, Banco de Cabo Verde (BCV) maintained its accommodative monetary policy over the year. The banking sector lowered some of its rates, which, given the persistent excess liquidity and low financial investment rates, has hampered the sector’s profitability, in a context of still high non-performing loans. Impaired loans accounted for 15.5% of total credit at the end of 2016, which, however, is down from 16.5% at the end of 2015.

Economic acceleration boosted tax collection, more specifically personal income tax (which also impacts on small and medium-sized enterprises), VAT and the tax on international transactions. Despite a continued increase in current expenditure, the sound performance of tax revenue helped to contain the fiscal deficit, at 3.6% of GDP (4.6% in 2015), which was also helped by the decrease in spending in the public investment programme. The results of the legislative elections in 2016 and the ensuing change of the ruling party caused significant delays in the implementation of a public investment programme that was already being phased down.

Albeit lower, the General government’s financing needs, which also include those resulting from financial asset operations (more specifically, loans used for on-lending), were mostly covered by domestic resources, with some contribution from external resources. Public debt proceeded on an upward path, with its share in GDP increasing to 129% at the end of 2016 (the external component dropped to 97% while the domestic component increased to 32%).

2017 should be characterised by economic growth similar to 2016, with projections pointing at a real GDP rise of 3.9%, largely on the back of investment and private consumption. Reflecting the expansion in imports, the current account deficit is expected to deteriorate, rising to 6.7% of GDP. However, the increase in foreign direct investment should be enough to continue to push reserves upwards, although reducing the coverage of goods and services imports.

31

In spite of the expected recovery in the public investment programme and the increase in current expenditure, the sound collection of taxes and projected inflows of grants should reduce the fiscal deficit to 3.4% of GDP.

The first months of 2017 have matched projections, as evidenced by an increase in the current account deficit and fiscal deficit improvements. Exceptions were mostly related to the non-resumption of the public investment programme, which contributed to a positive fiscal balance in the first quarter, and the decrease in foreign exchange reserves (by EUR 12 million, up to March).

Although back in positive territory, subdued inflation made it possible for BCV to introduce changes to monetary policy instruments in June, with a view to making them more effective: (i) marked reduction in rates on its main instruments (by 2 p.p. in its key, liquidity provision and rediscount rates – which moved down to 1.5%, 4.5% and 5.5% respectively; and by 0.15 p.p. in its liquidity absorption facility, to 0.1%); (ii) absorption of excess liquidity; (iii) removal of both the exemption on reserve requirements and the ceiling on its liquidity provision facility;

(iv) implementation of tender procedures for fixed-rate monetary regularisation securities (Portuguese acronym: TRM). With these measures, BCV has sought to stimulate financing for viable investment projects and, consequently, economic activity, which should be enhanced by the effective implementation of structural economic policy measures.

The sharper slowdown in the economies of its main trading partners, more specifically in the European Union, and the possible increase in global protectionism (and potential price increase in imports) are the more substantial external risks to Cabo Verde’s economy in 2017.

At domestic level, it is particularly important to monitor the costs and effects of recent changes to monetary policy instruments. Particular attention should also be paid to budgetary control, public debt management and financial stability. Under the latter, a resolution measure was applied to a small institution in March 2017, and part of its business was purchased by the second largest bank in Cabo Verde.

Table 2.14 • Main economic indicators

2014 2015 2016 2017

Est. Proj.

Real GDP (annual % change) 0.6 1.0 3.8 3.9

-0.4 -0.5 -0.3 1.2

7.3 5.9 8.4 5.5

-9.1 -4.6 -3.9 -6.7

5.4 6.4 6.9 7.0

-7.6 -4.6 -3.6 -3.4

115.9 126.0 129.0 –




Official reserves (months of imports)


Public debt, excluding TCMF(a) (% of GDP)

Sources: (for the subsequent charts also): International Monetary Fund, Banco de Cabo Verde, Ministry of Finance (Cabo Verde) and Cabo Verde National Institute of Statistics.Note: (a) Títulos Consolidados de Mobilização Financeira (consolidated financial mobilisation securities), covered by the resources of an offshore Trust Fund.

Cabo Verde




-1.3

1.5

4.0

1.1 0.8 0.61.0

3.8 3.9

-2

-1

0

1

2

3

4

5

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(proj.)

-4

-2

0

2

4

6

8

2009 2010 2011 2012 2013 2014 2015 2016 2017

Year-on-year % change Average % change

Following a number of years of weak growth, economic activity accelerated in 2016, owing to buoyancy mostly in consumption but also investment and to the performance of tourism revenue and foreign direct investment.

Throughout 2016 Cabo Verde posted negative inflation rates, chiefly reflecting the import component, particularly oil products, but also domestic factors such as the greater production of fresh produce.

Chart 2.15 • External accounts % of GDP

Chart 2.16 • Foreign exchange reserves Months of goods and services imports

-50

-40

-30

-20

-10

0

10

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(proj.)

Trade balance Current account Overall balance

0

1

2

3

4

5

6

7

8

2009 2010 2011 2012 2013 2014 2015 2016 2017(proj.)

Total net foreign assets Net foreign assets - BCV

Despite an increase in imports due to economic acceleration, the current account improved in 2016, reflecting increasing private transfers, including emigrants’ remittances, and continued recovery in demand from tourism.

In 2016 foreign exchange reserves proceeded on an upward path, covering nearly 7 months of goods and services imports, driven by foreign direct investment inflows, disbursements of foreign public loans and unwinding of investments abroad by the banking and non-banking sectors.

Chart 2.17 • Goods exports Destinations as a %, total in USD millions

Chart 2.18 • Goods imports Origins as a %, total in USD millions

0

50

100

150

200

250

300

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015 2016

Other France El SalvadorSpain Portugal Total

0

200

400

600

800

1,000

1,200

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015 2016

Other Brazil NetherlandsSpain Portugal Total

In 2016 the Iberian Peninsula continued to be the main market for Cabo Verde’s exports, particularly Spain (mostly sea products). Portugal partly recovered its share in the total, thus interrupting the gradual fall that started in 2008.

Since 1998 Portuguese products have accounted for approximately half of Cabo Verde’s imports. The geographical structure of imports has remained relatively stable, with the Netherlands and Spain taking on around 25% of the total since 2002.

33


Chart 2.20 • Public debt % of GDP

-20

-16

-12

-8

-4

0

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(budget)

Current balance Overall balance excl. grantsOverall balance

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013 2014 2015 2016(est.)

Mar-17(est.)

External - Multilateral External - BilateralDomestic (excl. TCMF) Domestic - TCMF

In 2016 the fiscal deficit continued to follow the downward trend that started in 2013, after the expanded public investment programme (launched as a response to the international crisis) had come to an end.

In addition to the need to fund fiscal deficits (although declining), it is also necessary to cover financial asset operations (more specifically, loans used for on-lending) and, consequently, public debt is still on the rise, although the external component is mostly concessional.

Chart 2.21 • Public revenue and expenditure % of GDP


-40-30-20-100

10203040

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(budget)

Exp: Invest. Prog. Exp: Other current Exp: InterestExp: Subs.+Tr.+Soc. ben. Exp: Goods and serv. Exp: PersonnelRev: Grants Rev: Transf. f/ SOE Rev: Other currentRec: Social sec. Rev: Taxes

Expe

nditu

reRe

venu

e

0%

10%

20%

30%Capital adequacy

Liquid assets(% of total assets)

ROE

ROA

Non-performingloans

(% of total loans)

Provisions(% of total loans)

2012 2014 2016

The reduction of the public investment programme was accompanied by sound tax collection, which made it possible to cut the fiscal deficit in 2016. However, the pressure from current expenditure has kept total expenditure close to 30% of GDP.

Against a background of growing banking activity, the banking system’s liquidity and solvency increased in 2016. However, profitability is still restricted by the limited options for investing funds and the still high (although declining) non-performing loan levels.


Chart 2.24 • Effective exchange rateIndexes 100 = 2000, monthly averages

-10

-5

0

5

10

15

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(proj.)

External position Net claims on gen. gov.Credit to the economy Other net assetsBroad money

96

97

98

99

100

101

102

103

104

105

2009 2010 2011 2012 2013 2014 2015 2016 2017

Nominal index Real index

(appreciation: +; depreciation: -)

Broad money growth accelerated in 2016, chiefly reflecting the improvement of the system’s net external position, as has been the case since 2013. Also, credit to the economy has grown, particularly loans to enterprises and to households for consumption.

In 2016 Cabo Verde’s escudo depreciated, in nominal effective terms, reflecting the Brazilian real’s appreciation against the euro. The escudo’s depreciation was exacerbated in real terms by the inflation differential vis-à-vis the other trading partners – Portugal, Spain and the Netherlands.

Cabo Verde



2012 2013 2014 2015 2016 2017

Est. Proj. Est. Proj. Est.

Output and pricesGDP m.p. EUR millions

Real % changeInflation (CPI) Y-o-y % change

Avg % change

Public financesTotal revenue % of GDP

Grants % of GDPTotal expenditure % of GDPOverall balance (commitment basis) % of GDP

Excluding grants % of GDPDomestic debt % of GDP

of which: TCMF (a) % of GDP

Money and creditClaims on general government (net)

Annual % change



Interest rates(b)

One-year deposits (average of the OMIs)

Annual rate

Rediscount Annual rateLiquidity provision Annual rateTreasury bills (91 days) Annual rate

Financial stabilityCapital adequacy (c) Percentage

Non-performing loans/total loans Percentage

Return on equity (ROE) Percentage

Balance of paymentsExports (current USD) Annual %

changeImports (current USD) Annual %

changeCurrent account % of GDP

Excluding official transfers % of GDPCurrent and capital account % of GDPOfficial reserves Months

of imports(e)

External debtTotal EUR millions

% of GDP% of exports(e)

Debt service % of exports(e)

Exchange rates (averages)EUR/CVE (official market) Average rateUSD/CVE (official market) Average rateNominal EERI (Index: 100 = 2000)(d) Annual %

changeReal EERI (Index: 100 = 2000)(d) Annual %

change

Sources: Banco de Cabo Verde, Ministry of Finance (Cabo Verde), International Monetary Fund and Banco de Portugal calculations.Notes: (a) Títulos Consolidados de Mobilização Financeira (consolidated financial mobilisation securities); (b) monthly averages (corresponding to December for annual figures); (c) regulatory capital/risk-weighted assets; (d) effective exchange rate index (EERI), calculated on the basis of official exchange rates applied to the currencies of Cabo Verde's four main trading partners over the 2010-14 period (appreciation: +; depreciation: -); (e) imports and exports of goods and services; (f) change from the previous December.

1,364 1,394 1,401 1,439 1,490 1,482 1,554 – 1.1 0.8 0.6 1.0 2.7 3.8 3.9 – 4.1 0.1 -0.4 -0.5 -1.8 -0.3 1.2 0.3 May2.5 1.5 -0.2 0.1 -1.6 -1.4 1.0 -0.9 May

24.4 24.5 22.9 26.9 30.7 26.5 29.5 – 2.8 2.6 1.8 2.4 3.9 2.4 3.1 –

34.7 33.8 30.6 31.5 36.0 30.0 33.0 – -10.3 -9.3 -7.6 -4.6 -5.4 -3.6 -3.4 – -13.1 -11.9 -9.4 -6.9 -9.3 -6.0 -6.4 – 30.6 31.6 34.3 36.2 – 39.1 – 39.0 Mar.

7.6 7.4 7.4 7.2 – 7.0 – 6.6 Mar.

20.3 10.7 12.1 4.0 12.4 4.0 13.2 4.3 May(f)

0.3 2.0 -0.1 1.6 3.4 3.6 3.2 0.5 May(f)

6.0 11.0 7.3 5.9 3.7 8.4 5.5 0.6 May(f)

3.8 4.3 4.4 4.1 – 3.8 – 3.6 May

9.8 9.8 7.8 7.5 – 7.5 – 7.5 May8.8 8.8 6.8 6.5 – 6.5 – 4.5 June4.2 2.7 1.5 1.3 – 0.7 – 0.5 Apr.

13.8 15.1 15.6 16.1 – 15.5 – 17.6 Mar.14.1 16.4 18.7 16.5 – 15.5 – 17.1 Mar.

2.7 3.5 3.1 4.8 – 3.4 – –

-18.2 6.4 37.7 -36.4 4.1 -7.8 11.7 –

-21.6 -3.1 6.7 -23.9 3.2 5.9 10.1 –

-14.0 -5.8 -9.1 -4.6 -4.7 -3.9 -6.7 – -17.4 -9.0 -12.1 -8.0 -4.7 -7.0 -6.7 – -13.3 -5.4 -8.7 -3.4 -4.1 -3.1 -6.0 –

3.8 4.8 5.4 6.4 6.0 6.9 7.0 6.3 Mar.

928.8 1,101.0 1,246.6 1,396.8 – 1,434.8 – 1,432.4 Mar.68.1 79.0 89.0 97.0 – 96.8 – 92.2 Mar.

153.9 173.8 185.0 230.0 – 214.8 – 206.1 Mar.4.3 4.7 4.8 6.3 – 5.7 – 7.4 Mar.

110.3 110.3 110.3 110.3 110.3 110.3 110.3 110.3 June

85.8 83.1 83.1 99.4 99.2 99.7 103.8 98.3 June0.5 0.7 0.0 1.1 – -0.7 – 0.2 June(f)

2.2 0.1 -0.4 -0.3 – -2.2 – -1.8 May(f)

35

Table 2.16 • Gross domestic productCurrent prices, CVE millions

2010 2011 2012 2013 2014 2015 2016 2017

Est. Est. Proj.

Primary sectorAgriculture, livestock and forestry

Fishing and aquaculture

Mining and quarrying

Secondary sector

Manufactured products

Electricity, gas, water

Construction

Tertiary sector

Whole. & retail trade; repair of motor vehicles

Accommodation and food service activities

Transportation and storage

Telecommunications and mail

Financial services

Real estate and other services

Corporate services

Public administration

Gross value added

Taxes and subsidies on products

Gross domestic product (m.p.)

Consumption

Public

Private

Investment

Gross fixed capital formation

Public

Private

Changes in inventories

Domestic demand

Exports of goods and services

Overall demand

Imports of goods and services

Memo items:

Gross domestic savings

Nominal GDPmp (EUR millions)

Nominal GDPmp (USD millions)

GDP deflator (annual % change)

Nominal GDP (annual % change)

Real GDP (annual % change)

Sources: Cabo Verde National Institute of Statistics, Banco de Cabo Verde, International Monetary Fund and Banco de Portugal calculations.

11,780 12,215 13,249 13,322 13,089 14,432 14,370 – 9,705 10,598 11,659 11,393 10,946 12,005 12,662 –

1,367 1,005 1,040 1,334 1,433 1,872 1,162 –

708 612 550 595 710 556 545 –

24,440 25,668 25,018 26,330 28,212 28,192 27,927 –

7,528 8,054 8,547 8,916 9,862 10,389 11,514 –

1,939 2,158 3,268 3,999 4,071 5,234 4,648 –

14,973 15,456 13,203 13,415 14,278 12,569 11,765 –

84,749 89,645 93,463 95,045 94,563 96,043 99,731 –

17,609 19,002 18,785 17,278 17,720 16,179 16,020 –

14,781 14,038 13,300 14,664 13,105 14,999 15,129 –

4,792 5,896 8,651 9,065 8,221 7,260 7,886 –

6,254 6,246 6,330 6,130 6,122 6,013 5,554 –

5,120 5,077 5,238 5,377 5,986 6,138 6,758 –

14,604 14,696 15,885 15,897 15,948 16,210 16,654 –

2,570 3,176 3,392 3,489 2,951 4,057 4,354 –

19,019 21,514 21,882 23,144 24,510 25,188 27,375 –

120,969 127,528 131,730 134,697 135,865 138,667 142,028 –

17,598 20,400 18,622 19,026 18,571 20,032 21,354 –

138,567 147,928 150,352 153,723 154,436 158,699 163,381 171,311

112,863 120,269 123,620 127,167 128,676 133,410 141,910 –

25,536 27,401 25,963 26,837 28,496 29,918 33,680 –

87,327 92,868 97,657 100,330 100,180 103,491 108,231 –

66,024 70,277 55,920 48,622 57,148 47,906 52,217 –

62,625 69,128 52,844 46,337 53,317 45,681 52,578 –

23,935 19,236 22,320 18,451 11,125 11,635 8,443 –

38,690 49,892 30,524 27,886 42,192 34,045 44,135 –

3,399 1,149 3,076 2,285 3,831 2,225 –361 –

178,887 190,546 179,540 175,789 185,824 181,316 194,127 –

45,271 52,541 60,790 62,246 62,332 71,268 73,660 –

224,158 243,087 240,330 238,035 248,156 252,583 267,787 –

85,591 95,159 89,978 84,312 93,720 93,884 104,406 –

25,704 27,659 26,732 26,556 25,760 25,289 21,471 –

1,257 1,342 1,364 1,394 1,401 1,439 1,482 1,554

1,664 1,866 1,752 1,850 1,859 1,597 1,639 1,650

0.5 2.7 0.6 1.4 –0.1 1.7 –0.8 0.9

2.0 6.8 1.6 2.2 0.5 2.8 3.0 4.9

1.5 4.0 1.1 0.8 0.6 1.0 3.8 3.9

Cabo Verde


Table 2.17 • Consumer price indexPercentages

Monthly change Year-on-year change Average change

[1] [2] [3]

2003 December

2004 December

2005 December

2006 December

2007 December

2008 December

2009 December

2010 December

2011 December

2012 December

2013 December

2014 December

2015 December

2016 December

2015 January

February

March

April

May

June

July

August

September

October

November

December

December (proj.)

2016 January

February

March

April

May

June

July

August

September

October

November

December

December (proj.)

2017 January

February

March

April

May

December (proj.)

Sources: Banco de Cabo Verde and Banco de Portugal calculations.Notes: [1] month (n) / month (n-1); [2] month (n) / month (n) of the previous year; [3] last 12 months / 12 previous months.

– -2.3 1.2 – 0.6 -1.9

– 1.8 0.4

– 5.8 4.8

– 4.0 4.4

– 6.7 6.8

– -0.4 1.0

– 3.4 2.1

– 3.6 4.5

– 4.1 2.5

– 0.1 1.5

– -0.4 -0.2

– -0.5 0.1

– -0.3 -1.4

0.2 0.1 -0.2

-0.4 -0.2 -0.3

-0.4 -0.2 -0.4

-0.3 0.3 -0.3

0.2 0.3 -0.3

0.0 0.3 -0.2

0.3 0.3 -0.2

0.1 0.3 -0.1

0.3 0.6 0.0

-0.1 0.4 0.1

-0.2 -0.2 0.1

-0.2 -0.5 0.1

– 2.0 1.5

-0.5 -1.2 0.0

-0.5 -1.3 -0.1

-0.3 -1.2 -0.1

0.0 -0.9 -0.2

0.1 -1.0 -0.4

-1.3 -2.3 -0.6

0.2 -2.3 -0.8

0.6 -1.8 -1.0

0.1 -2.1 -1.2

0.7 -1.3 -1.3

-0.1 -1.3 -1.4

0.8 -0.3 -1.4

– -1.8 -1.6

-0.7 -0.4 -1.3

0.3 0.3 -1.2

-0.2 0.5 -1.1

-0.3 0.3 -1.0

0.2 0.3 -0.9

– 1.2 1.0

37

Table 2.18 • Balance of paymentsCVE millions

2013 20142015 2016 2017

Est. Proj. Q I Est. Proj. Q I

1. Current accountTrade

Exports (f.o.b.)(a)

Imports (f.o.b.)

Services (net)

Exports

of which: Transport

Tourism

Imports

of which: Transport

Tourism

Income (net)

Exports

of which: Income f/ the TF(b) (prev. year)

Imports

of which: Interest on sched. public debt

Current transfers

Official transfers

Private transfers

of which: Emigrant remittances

2. Capital and financial accountCapital account

Capital transfers

Financial account

Direct investment

Portfolio investment

Other transactions

of which: Disburs. of loans to gen. gov.

Scheduled amortisation

3. Errors and omissions

4. Overall balance: (1)+(2)+(3)

5. FinancingChange in official reserves (increase: - ) Exceptional financing

of which: Drawings from ACC Facility(c)

Reimb. of ACC Facility(c)

Change in arrears (increase: +)

6. Financing GAP(d): (4)+(5)

Memo items:


Current and capital account (% of GDP) Official reserves (in months of imports)(e)

Sources: Banco de Cabo Verde, International Monetary Fund and Banco de Portugal calculations.Notes: (a) Includes sales of fuel to ships and re-exports; (b) offshore fund (Trust Fund) to support the conversion of domestic debt; (c) Exchange Rate Cooperation Agreement (Acordo de Cooperação Cambial) between Portugal and Cabo Verde; (d) net borrowing (-)/net lending (+); (e) net foreign assets of BCV and imports of goods and services in the year.

-8,898 -14,025 -7,292 -7,683 124 -6,367 -11,495 -1,099-51,533 -50,277 -48,871 -50,297 -10,899 -54,113 -59,345 -17,579

15,283 21,044 16,024 16,681 4,008 14,813 16,548 3,844

-66,816 -71,322 -64,894 -66,977 -14,907 -68,926 -75,893 -21,422

25,207 21,904 22,086 22,813 6,172 23,367 26,405 10,283

54,551 53,241 50,940 52,447 15,017 58,847 60,083 19,271

11,235 9,526 9,478 – 2,563 10,397 – 3,456

33,325 32,121 33,182 35,372 9,748 34,877 36,759 12,288

-29,344 -31,337 -28,855 -29,634 -8,845 -35,480 -33,678 -8,988

-7,020 -7,842 -7,602 – -2,008 -8,726 – -2,234

-3,728 -2,692 -2,325 – -1,438 -5,812 – -1,328

-5,367 -7,692 -5,751 -6,365 -2,227 -5,634 -5,965 -1,496

1,151 1,165 1,254 – 421 2,361 – 588

373 373 414 267 0 267 – 0

-6,518 -8,857 -7,006 – -2,648 -7,995 – -2,084

-1,438 -1,518 -1,734 -1,771 -458 -1,662 -2,031 -495

22,795 22,039 25,244 26,165 7,079 30,013 27,410 7,692

4,948 4,664 5,395 – 989 4,998 – 1,939

17,847 17,375 19,850 – 6,089 25,015 – 5,753

14,441 16,158 19,679 19,144 4,916 20,503 – 4,727

14,619 19,390 13,251 9,857 -540 14,189 10,149 3,291

533 659 1,884 908 133 1,316 1,200 411

533 659 1,884 908 133 1,316 1,200 411

14,085 18,731 11,367 8,949 -673 12,873 8,949 2,880

4,627 10,557 9,359 10,506 2,900 10,862 10,506 3,712

-2,281 -2,001 -2,089 -416 -1,004 -4,024 -416 -1,023

11,739 10,175 4,098 -1,141 -2,569 6,035 -1,141 191

19,391 -18,911 13,074 – 665 5,819 – 588

-1,823 -2,036 -2,484 – -811 -2,553 – -1,071

-117 2,481 -2,436 0 332 1,328 4,581 -3,536

5,604 7,845 3,524 2,173 -83 9,150 3,235 -1,344-5,604 -7,845 -3,524 -2,173 83 -9,150 -3,235 1,344

-5,604 -7,845 -3,524 -2,173 83 -9,150 -3,235 1,344

0 0 0 – 0 0 – 0

0 0 0 – 0 0 – 0

0 0 0 – 0 0 – 0

0 0 0 – 0 0 – 0

0 0 0 0 0 0 0 0

-5.8 -9.1 -4.6 -4.7 – -3.9 -6.7 –

-5.4 -8.7 -3.4 -4.1 – -3.1 -6.0 –

4.8 5.4 6.4 6.0 6.1 6.9 7.0 6.3

Cabo Verde


Table 2.19 • Goods exportsDestinations as a percentage of total exports

2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 to 2016

El Salvador 0.0 0.0 0.0 3.5 4.9 3.4 4.5 2.5 0.0 2.6 0.0 2.9 0.6 6.2 0.0 3.4 0.2 0.0 0.0 1.6 0.5 0.5 0.3 0.2 0.2 0.2 0.3 0.3 0.4 0.3

40.6 33.6 22.7 18.0 16.0 16.2 14.7 14.1 17.0 19.6 37.2 62.0 72.6 70.2 76.3 67.4 63.9 67.2 64.2 65.7

0.4 0.9 1.6 0.5 1.3 1.1 1.1 1.8 1.3 1.1 21.3 0.1 2.2 1.4 1.3 8.4 15.3 14.0 17.1 9.2

FranceNetherlandsPortugalSpainUSAOther

Sources: Banco de Cabo Verde, International Monetary Fund and Banco de Portugal calculations.

Table 2.20 • Goods importsOrigins as a percentage of total exports

2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 to 2016

Brazil 5.7 4.5 3.7 2.7 4.0 3.6 3.3 4.1 3.5 3.9 2.0 1.9 3.7 1.7 1.6 1.4 2.0 2.4 2.2 2.1 1.6 2.3 0.4 0.5 1.0 1.4 0.6 1.1 0.9 1.1

17.0 16.7 16.8 19.1 15.0 20.9 15.6 14.3 7.3 16.1 50.3 48.3 51.4 44.7 48.2 43.8 44.3 50.6 49.6 47.7

7.3 9.8 10.6 9.9 7.2 7.9 7.6 7.8 11.1 8.8 16.2 16.4 13.3 21.3 22.9 21.1 26.7 19.6 25.4 20.3

GermanyNetherlandsPortugalSpainUSAOther

Sources: Banco de Cabo Verde, International Monetary Fund and Banco de Portugal calculations.

Table 2.21 • Public debtCVE millions

2010 2011 2012 2013 2014 2015 2016 Mar. 17

Est. Est. Est.

Total external debtMultilateral creditors

Bilateral creditors

Government

Other

Total domestic debt

of which: Treasury bills

Treasury bonds

Banking system

Non-banking system

TCMF (a)

(% of GDP)Total external debt

Total domestic debt (excluding TCMF)

TCMF

Total domestic debt (including TCMF)

(% of exports of goods and services)Total external debt 133.1 134.5 153.9 173.8 185.0 230.0 214.8 206.1

4.7 4.2 4.3 4.7 4.8 6.3 5.7 7.4 Medium and long-term debt service

Sources: Banco de Cabo Verde, Ministry of Finance (Cabo Verde), IMF and Banco de Portugal calculations.Notes: (a) Títulos Consolidados de Mobilização Financeira (consolidated financial mobilisation securities).

70,433 84,101 10,2412 121,401 137,453 154,015 158,210 157,948 48,274 49,777 53,261 54,887 64,327 74,406 75,910 75,312

22,159 34,323 49,151 66,514 73,127 79,609 82,299 82,635

13,369 18,157 21,808 24,555 25,143 28,689 29,679 29,701

8,790 16,166 27,343 41,959 47,983 50,920 52,620 52,934

40,907 43,106 45,934 48,556 52,977 57,387 63,905 66,743

600 1,550 680 682 193 0 0 1,296

27,369 28,609 32,254 34,870 39,619 44,197 50,625 52,074

15,162 17,236 17,429 20,939 25,961 27,067 31,348 34,059

14,356 14,482 17,117 16,228 15,628 18,931 21,168 21,296

11,389 11,389 11,389 11,389 11,389 11,389 11,389 11,389

50.8 56.9 68.1 79.0 89.0 97.0 96.8 92.2

21.3 21.4 23.0 24.2 26.9 29.0 32.1 32.3

8.2 7.7 7.6 7.4 7.4 7.2 7.0 6.6

29.5 29.1 30.6 31.6 34.3 36.2 39.1 39.0

39

Table 2.22 • Government operationsCVE millions

2013 2014 2015 2016 2017

Budg. Q 1 Est. l.e.(a) Budg. Q 1 l.e.(a)

1. Total revenue1.1. Current revenue

TaxesIncome taxesTaxes on goods and services

of which: VATTaxes on international trans.Other taxes

Social contributionsTransfers (Public Administration)Other revenue

1.2. Grants1.3. Transf. f/ state owned entrep.(b)

2. Total expenditure2.1. Current expenditure(c)

of which: From invest. projectsCompensation of employeesGoods and services Interest and other charges

of which: Domestic debtExternal debt

SubsidiesTransfersSocial benefitsOther expenditure

of wich: Scholarships2.2. Investment programme

3. Non-financial assets: (3.1-3.2)3.1. Purchase of non-financial assets3.2. Sale of non-financial assets

4. Current balance: (1.1-2.1)

5. Overall balance excl. grants: (1-2-3-1.2)

6. Overall balance (commitment basis): (1-2-3)

7. Financing7.1. Financial assets

Loan repay. to state ow. enterp.Loans to state owned enterprisesShares and other equityOther financial assets

7.2. Financial liabilitiesExternal (net)

DisbursementsAmortisation

Domestic (net)Banking systemOther

8. Financing gap/discrepancy(e): (6+7)

Sources: Banco de Cabo Verde, Ministry of Finance (Cabo Verde), IMF and Banco de Portugal calculations.Notes: (a) Level of budget execution (%); (b) Share of capital expenditure of state-owned enterprises (usually to finance infrastructures related to the activities of these enterprises); (c) Includes values to settle in 2015; (d) Net borrowing (+)/net lending (-).

37,716 35,327 42,677 50,355 9,929 43,220 85.8 50,538 11,711 23.233,692 32,540 38,916 44,023 9,497 39,359 89.4 45,304 10,081 22.328099 27060 30,516 34,938 8,025 32,304 92.5 37,407 8,505 22.78,596 7,747 9,669 10,504 2,584 10,078 95.9 11,590 2,396 20.7

13,136 12,870 14,047 16,456 3,764 14,941 90.8 17,475 4,302 24.610,522 10,170 11,293 13,015 3,024 11,986 92.1 13,784 3,479 25.2

5,700 5,754 6,082 7,154 1,562 6,813 95.2 7,637 1,671 21.9668 688 719 824 115 472 57.3 705 136 19.3

43 56 46 208 13 56 27 59 15 24.90 0 197 0 4 94 – 273 1 0

5,550 5,424 8,157 8,877 1,454 6,906 77.8 7,564 1,560 20.64,024 2,787 3,761 6,332 432 3,861 61.0 5,234 1,630 31.1

0 0 0 0 0 0 – 0 0 –

51,982 47,240 50,024 59,139 10,602 49,060 83.0 56,535 10,974 19.435,436 37,549 41,068 49,614 9,946 44,147 89.0 48931 10,385 21.2

4,471 5,498 6,735 9,790 1,287 6,758 69.0 8,314 822 9.916,601 17,175 17,530 20,380 4,597 18,347 90.0 20,817 4,478 21.5

5,064 5,747 7,433 9,811 1,234 6,806 69.4 9,124 889 9.73,383 3,444 4,134 4,261 980 4,223 99.1 4,709 1,108 23.51,878 1,910 2,374 2,415 522 2,455 101.7 2,590 593 22.91,438 1,518 1,724 1,750 458 1,748 99.9 2,005 495 24.7

101 107 161 246 38 160 65.1 233 35 15.24,075 4,389 4,755 6,265 1,242 4,904 78.3 5,973 1,022 17.14,150 4,348 4,735 5,102 1,233 5,148 100.9 5,458 1,298 23.82,062 2,339 2,320 3,549 392 3,137 88.4 2,617 493 18.9

568 598 579 591 126 591 100.0 639 121 19.016,546 9,691 8,956 9,524 656 4,912 51.6 7,605 589 7.7

55 -150 -118 149 0 122 81.8 -205 -159 77.568 160 166 285 13 160 56.3 278 4 1.414 310 284 135 13 38 28.2 483 163 33.7

-1,744 -5,009 -2,152 -5,591 -449 -4,788 – -3,627 -304 –

-18,345 -14,550 -10,991 -15,265 -1,106 -9,823 – -11,027 -733 –

-14,321 -11,763 -7,229 -8,933 -674 -5,962 – -5,793 897 –

14,321 11,763 7,229 8,933 -1,499 5,962 – 5,793 495 – -6,311 -5,036 -5,092 -7,185 -417 -4,801 – -6,683 -339 –

128 129 273 267 135 313 – 303 8 – -5,629 -5,037 -3,929 -5,859 -178 -3,632 – -5,960 -382 –

-810 -101 -1,457 -2,000 -390 -1,510 – -1,108 0 – 0 -28 21 407 16 28 – 82 36 –

20,632 16,799 12,321 16,117 -1,082 10,763 – 12,475 833 – 19,692 15,605 10,579 11,273 -291 3,204 – 8,198 -618 – 21,515 17,641 13,011 14,190 519 5,819 – 11,882 453 – -1,823 -2,036 -2,432 -2,918 -811 -2,614 – -3,684 -1,071 –

940 1,194 1,742 4,844 -791 7,558 – 4,277 1,451 – 2,350 4,062 147 4,501 -2,354 1,190 – 4,061 1,323 –

-1,409 -2,868 1,595 343 1,564 6,368 – 216 128 – 0 0 0 0 -2,173 0 – 0 1,391 –

Cabo Verde


Tabl

e 2.

23 •

Mon

etar

y su

rvey

CVE

mill

ions

2012

2013

20

1420

1520

15 /

2014

2016

20

16 /

2015

2017

20

17p

/ 201

620

17

Est.

[1]

[2]

Prog

. Es

t. [1

] [2

] Pr

og.

[1]

[2]

Mar

.(b)

Exte

rnal

pos

ition

Fore

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chan

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of th

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year

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.

26,9

5836

,168

44,0

6149

,950

13.4

4.0

48,8

0159

,264

18.6

6.0

61,1

103.

11.

158

,193

28,3

1238

,101

46,0

3851

,915

12.8

4.0

– 60

,936

17.4

5.8

– –

–59

,810

32,8

6138

,360

46,4

6150

,079

7.8

2.5

–59

,773

19.4

6.3

––

–57

,996

32,7

7838

,280

46,3

7149

,998

7.8

2.5

48,4

3659

,692

19.4

6.3

63,4

766.

32.

357

,914

8380

9181

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5-0

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––

81

-4,5

50-2

59-4

231,

836

-533

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1,16

3-3

6.7

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––

–1,

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-1,3

54-1

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-1,9

77-1

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-0.6

0.0

–-1

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-14.

90.

2–

––

-1,6

17

95,6

3399

,912

101,

944

104,

637

2.6

1.8

111,

580

108,

245

3.4

2.3

115,

621

6.8

4.4

110,

284

116,

452

120,

795

123,

782

126,

413

2.1

1.8

133,

372

131,

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3.7

3.0

138,

357

5.5

4.3

132,

911

22,8

5125

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28,3

5729

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4.0

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33,1

4230

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0.8

34,7

4613

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432

,008

12,1

8614

,362

17,4

3617

,387

-0.3

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24.2

2.7

––

–23

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11,1

9211

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11,1

9211

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0.0

0.0

–11

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0.0

0.0

––

–11

,192

93,6

0195

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95,4

2596

,919

1.6

1.0

100,

229

100,

398

3.6

2.3

103,

611

3.2

1.9

100,

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824

865

840

3,15

327

5.4

1.6

–3,

344

6.1

0.1

––

– 3,

476

92,7

7794

,645

94,5

8593

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-0.9

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3.5

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–97

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00

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– –

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– –

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820

-20,

883

-21,

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776

0.3

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736

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122,

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216

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154,

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5.9

5.9

160,

382

167,

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8.4

8.4

176,

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5.5

5.5

168,

477

32,5

7438

,427

45,7

7846

,749

2.1

0.7

–56

,433

20.7

6.3

––

–55

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7,88

68,

216

8,70

78,

967

3.0

0.2

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207

2.7

0.2

––

–7,

429

33,1

8739

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45,4

6747

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4.5

1.4

–54

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14.3

4.4

––

–57

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81,5

1788

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91,8

3198

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4.3

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8–

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103,

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122,

590

136,

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154,

586

5.9

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0,38

216

7,51

08.

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176,

731

5.5

–16

8,47

7

41


2011 2012 2013 2014 2015 2016 2017

Dec. Dec. Dec. Dec. Dec. Mar. Jun. Sep. Dec. Mar. May Jun.

Lending rates7-30 days

31-90 days

91-180 days

181 days-1year

1-2 years

2-5 years

5-10 years

Over 10 years

Overdraft

Deposit rates

Residents

7-30 days

31-90 days

91-180 days

181 days-1 year

1-2 years

Non-residents

7-30 days

31-90 days

91-180 days

181 days-1 year

1-2 years

Emigrants

7-30 days

31-90 days

91-180 days

181 days-1 year

1-2 years

Reference rates

BCV instruments

Rediscount

Liquidity provision

Liquidity absorption

TRM (14 days)

Treasury bills

91 days

182 days

364 days

Memo item:

Inflation (y-o-y % change)

Sources: Banco de Cabo Verde and Banco de Portugal calculations.Notes: Lending and deposit rates shown refer to effective interest rates by calculating average rates weighted by the amounts of credit/investments regarding lending/deposit operations applied to residents, non-residents and emigrants.

9.3 11.5 12.5 11.9 10.2 10.0 11.8 11.8 10.4 11.1 11.1 –

9.4 11.7 11.3 10.5 11.0 7.3 6.4 9.7 9.4 8.9 10.9 –

9.0 10.1 11.2 11.3 10.7 9.5 10.0 9.5 9.3 9.9 8.9 –

9.5 9.3 9.0 8.5 9.5 9.6 8.7 8.1 7.9 7.7 8.0 –

10.1 10.0 10.4 11.5 9.6 9.5 9.7 10.0 10.3 10.5 9.9 –

10.1 10.2 10.5 10.9 10.5 10.6 10.7 10.5 10.4 10.4 10.4 –

9.6 9.5 9.5 9.9 9.6 9.7 9.3 9.3 9.2 9.4 9.4 –

9.2 8.8 8.9 8.8 8.5 8.6 8.6 8.6 8.6 8.6 8.6 –

16.3 16.3 17.9 16.2 15.2 16.0 17.2 16.7 17.1 17.4 17.8 –

2.9 3.3 4.4 2.6 2.1 2.1 2.1 2.2 2.1 1.4 1.4 –

3.4 4.1 4.3 2.9 2.8 2.7 2.5 2.5 2.5 2.5 2.3 –

4.0 4.1 4.2 3.5 3.5 3.3 3.4 3.3 3.2 2.6 2.6 –

4.2 3.8 4.3 4.4 4.1 4.0 3.8 3.8 3.8 3.7 3.6 –

4.7 4.9 4.9 4.7 4.6 4.2 4.2 4.1 4.1 4.0 3.9 –

3.0 2.1 4.0 2.6 2.2 1.8 1.0 1.0 1.9 0.3 0.3 –

3.1 4.1 3.7 2.2 1.9 1.8 1.5 1.3 1.4 1.0 1.3 –

3.8 3.8 3.8 2.7 3.1 2.8 2.7 2.0 2.0 1.7 1.4 –

4.0 3.4 4.1 3.9 3.7 3.8 3.7 3.6 3.4 3.1 3.0 –

4.7 5.1 4.8 4.7 4.6 4.5 4.4 4.2 4.1 3.9 3.7 –

3.5 1.8 4.3 2.6 2.1 2.0 2.0 2.0 2.0 1.4 1.4 –

3.5 5.6 4.5 3.1 3.0 2.9 3.1 2.8 2.8 2.6 2.6 –

4.2 4.0 4.3 4.0 3.7 3.5 3.4 3.4 3.4 3.1 3.0 –

4.2 3.7 4.2 4.2 4.1 4.1 4.0 4.0 4.0 3.9 3.8 –

5.0 5.5 5.4 5.0 4.7 4.5 4.5 4.3 4.2 4.0 3.9 –

7.5 9.8 9.8 7.8 7.5 7.5 7.5 7.5 7.5 7.5 7.5 5,5

7.3 8.8 8.8 6.8 6.5 6.5 6.5 6.5 6.5 6.5 6.5 4,5

1.8 3.3 1.0 0.5 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0,1

4.3 5.8 – 0.6 0.3 0.3 0.3 0.3 0.3 0.3 0.3 –

4.1 – – – – – – – – – – –

4.2 – – – – 0.6 – – – – – –

– 4.5 – – – – – – – – – –

3.6 4.1 0.1 -0.4 -0.5 -1.2 –2.3 -2.1 -0.3 0.5 0.3 –

Cabo Verde



2012 2013 2014 2015 20162017

Mar.

Solvency

Capital adequacy(a)

Tier1/risk-weighted assets

Asset quality(b)

Non-performing loans/total loans

Impairment/non-performing loans

Provisions/non-performing loans

Return

Return on equity (ROE)

Return on assets (ROA)

Interest margin/gross income

Non-interest expenses/gross income

Liquidity(c)

Liquid assets/total assets

Liquid assets/short-term liabilities

Other indicators

General government deposits/total deposits

Emigrant deposits/total deposits

Private sector credit/total deposits

Personnel costs/operating costs

Interest spread, 1 to 2 years (asset – liability)

Interest spread, 1 to 2 years (emigrant deposits – euro area deposits)

Sources: Banco de Cabo Verde and Banco de Portugal calculations.Notes: (a) Regulatory capital/risk-weighted assets; (b) in accordance with IFRS/IAS definitions; (c) liquid assets include cash-in-vault and marketable securities, and short-term liabilities include demand deposits.

13.8 15.1 15.6 16.1 15.5 17.6 13.5 13.7 14.4 14.8 15.5 16.4

14.1 16.4 18.7 16.5 15.5 17.1 53.7 51.6 48.8 54.4 58.3 54.2 53.5 53.9 52.4 59.5 60.5 55.8

2.7 3.5 3.1 4.8 3.4 –0.2 0.3 0.2 0.4 0.2 –

75.5 75.3 71.8 73.1 76.7 77.2 68.3 68.4 72.5 66.9 67.7 66.8

15.0 21.2 19.9 21.9 24.0 23.4 21.1 27.9 24.4 26.8 29.0 27.9

9.7 11.4 13.5 12.6 14.5 15.3 37.1 33.4 32.9 33.3 32.1 32.1 79.1 67.5 61.5 59.5 55.6 54.3 56.1 55.3 54.8 56.6 58.9 61.5

5.2 5.5 6.8 5.0 6.2 6.5

2.9 3.8 4.2 4.1 4.0 3.4

43


EERI(a)

Index: 100 = 2000

USD/CVE Nominal Real

20032004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2015 January

February

March

April

May

June

July

August

September

October

November

December

2016 January

February

March

April

May

June

July

August

September

October

November

December

2017 January

February

March

April

May

June

Sources: Banco de Cabo Verde and Banco de Portugal calculations.Notes: (a) Effective exchange rate index (EERI), calculated on the basis of official exchange rates applied to the currencies of Cabo Verde's four main trading partners over the 2010-14 period (appreciation: +; depreciation: -).

97.8 103.1 98.1

88.7 103.3 94.1

88.6 102.4 91.4

87.9 102.0 93.7

80.6 101.9 95.6

75.3 101.9 99.2

79.4 102.1 100.5

83.3 101.4 100.3

79.3 101.4 101.3

85.8 101.7 101.5

83.1 102.2 102.3

83.1 102.6 102.3

99.4 103.3 102.3

99.7 103.5 100.4

94.6 102.5 104.1

97.1 102.7 103.7

101.6 103.0 102.0

102.5 102.8 101.1

98.8 103.0 101.0

98.4 103.1 101.1

100.2 103.2 101.8

99.1 103.6 102.7

98.3 104.1 103.1

98.1 104.1 102.8

102.5 103.7 102.5

101.5 103.9 102.7

101.6 104.1 103.4

99.5 104.1 103.1

99.5 103.8 101.0

97.3 103.7 100.5

97.4 103.7 100.2

98.2 103.5 98.7

99.6 103.3 99.0

98.3 103.2 99.6

98.4 103.3 99.4

99.9 103.1 99.5

102.1 103.2 99.8

104.6 103.2 100.4

104.0 103.0 100.0

103.5 102.9 100.2

103.1 102.9 99.0

103.0 102.9 98.0

99.9 103.2 98.6

98.3 103.3 –

Cabo Verde

2.3. Guinea-BissauArea: 36,125 Km2

Capital: Bissau


Currency: CFA franc (XOF)

The economic recovery in Guinea-Bissau continued in 2016, despite the ongoing political uncertainty in the country. The production of cashew nuts reached record highs, benefiting from an increase in their international price. The external accounts and public finances deteriorated, in both cases mainly owing to a reduction in grants from development partners. Despite remaining in positive territory, inflation has been slowing down since the second half of 2016. The IMF adjustment programme resumed, following the reversal of the bank bailouts that occurred in 2015. The financial system still faces significant challenges.


In spite of the political uncertainty prevailing since the summer of 2015, the economic recovery is still ongoing in Guinea-Bissau. Successive changes of government and the lack of a functioning National People’s Assembly have not prevented the economy from continuing to perform well, despite the obstacles caused to policy-making and implementation.

In addition, Guinea-Bissau’s authorities overcame the impasse which last year jeopardised the continuation of the adjustment programme, signed in July 2015 with the IMF under the Extended Credit Facility. State intervention in two financial institutions bailed out in 2015, which had resulted in non-compliance with the limits established, was annulled, thereby resolving the disagreement with the IMF and paving the way for the programme to resume. A good implementation of the programme is key, both owing to the importance of the financial assistance and because of its catalysing effect on support provided by the country’s development partners.

Economic activity grew by 5.1% in 2016, as in the previous year, boosted by favourable domestic and external factors. The reduction in market distortions after closure of the Fundo de Promoção da Industrialização dos Produtos Agrícolas (fund to promote the industrialisation of agricultural products) – financed by a surcharge on the value of cashew exports – and a high international cashew price – which even surpassed the previous historical high recorded in 2011 – contributed to the best year for Guinea-Bissau in the production of cashew nuts, which reached 206,000 tonnes. The secondary and tertiary sectors, which benefited from a rise in income and improvements in the supply of water and electricity, also performed well, in particular the construction sector. For 2017, the economy is expected to continue to follow a growth trend, with a 5% real change projected for GDP.

Developments in the production of cashew nuts also had a strong impact on Guinea Bissau’s external accounts, whose export sector is poorly diversified (exports of this good usually account for 80 to 90% of the total value of goods exports; in 2016, this share was even higher, reaching

99%). Consequently, the trade balance was positive for the second year in a row, equating to 4.3% of GDP, also helped by an improvement in terms of trade. However, the performance of the other items in the current account balance was negative, compared with 2015, with the drop in official transfers (mostly grants) standing out. The political uncertainty and the disagreement with the IMF – which has since been resolved – led to the withdrawal of financial assistance by the country’s development partners, similarly to 2015. The final outcome of these movements was a deterioration of 1.1 percentage points (p.p.) in the current account, which stood at 0.9% of GDP. The outlook for 2017 shows a further deterioration in the external current account, which is expected to post a deficit of 0.6% of GDP, owing to a rise in oil prices and an increase in imports associated with a higher level of investment and the continued expansion in economic activity.

The public finances remained in negative territory in 2016, with the fiscal balance reaching -4.8% of GDP, a deterioration of 1.7 p.p. from 2015 (when compared with the deficit for 2015 without considering the cost of bank bailouts which have since been reversed). This deterioration in the deficit was mostly due to a drop of 10.4% in government revenue, in particular the aforementioned decline in grants. In turn, tax revenue had a better performance (an increase of 2.6% from 2015), benefiting from the stronger momentum in the economy and a more efficient tax administration. On the expenditure side, public investment experienced a contraction of 14.1% given its high dependence on external financing. Continued improvements in the efficiency of the tax administration and greater budgetary discipline are expected to contribute to the public deficit declining to around 2% of GDP in 2017. These projections should nevertheless take into account a possible court ruling against the annulment of the bank bailouts, which would have a negative impact on the public accounts.

Inflation remained at relatively low levels, but still in positive territory. After a slight acceleration between the second half of 2015 and mid-2016, the rise in the general price level

47

was considerably more subdued, despite the continued and robust economic recovery. The year-on-year inflation rate in 2016 stood at 1.6% (0.9 p.p. points less than in 2015), compared with 3% in July of the same year, the highest level in more than four years. This slowdown in inflation in 2016 is in contrast to the behaviour observed in the previous year, when the year-on-year inflation rate increased by 2.5 p.p.. The short-term outlook for developments in prices points to a slight increase in inflation, to close to 2%, reflecting expectations of a small recovery in international oil prices.

Guinea-Bissau’s financial system still faces considerable challenges. With the reversal of the two bank bailouts that occurred in 2015, non-performing loans returned to high levels, standing at 19.4% at the end of the first quarter of 2017. In addition, the two institutions in question put in place significant provisions, which markedly reduced their solvency ratios. This led to a need to increase own funds, which

is not guaranteed in one of the institutions. Bank profitability remains low, with return on assets standing at 2.8%.

Broad money expanded further in 2016, but at a significantly slower pace than in the past few years (a change of 7.7% from 2015). The main contribution to this expansion in liquidity came from an accumulation of foreign exchange reserves by commercial banks. Considering that the economy was performing well and a regional bank started its activities in the country, the 10.5% increase in credit to the economy was modest, reflecting the lack of bankable projects.

As a result of the currency peg between the CFA franc and the euro, the behaviour of the exchange rate against the Indian rupee was crucial to developments in external competitiveness. Therefore, the depreciation against this currency resulted in a slight gain in nominal competitiveness in 2016.

Table 2.27 • Table 27 • Main economic indicators

2013 2014 2015 2016 2017

Est. Est. Proj.

Real GDP (annual % change) 3.3 1.0 5.1 5.1 5.0

-0.1 -0.1 2.4 1.6 –

14.8 29.2 25.4 7.7 5.0

-5.0 0.6 2.1 0.9 -0.6

-1.8 -2.6 -3.0 -4.8 -1.9

31.2 33.3 31.4 – –






Sources (for the subsequent charts also): BCEAO National Directorate for Guinea-Bissau, Ministry of Economy and Finance of Guinea-Bissau, National Statistics Institute of Guinea-Bissau, European Central Bank and International Monetary Fund.

Guinea-Bissau




3.44.6

8.1

-1.7

3.3

1.0

5.1 5.1 5.0

-4

-2

0

2

4

6

8

10

2009 2010 2011 2012 2013 2014 2015(est.)

2016(est.)

2017(proj.)

-8

-4

0

4

8

12

2009 2010 2011 2012 2013 2014 2015 2016 2017


Domestic and external factors contributed to the strong performance of the economy in 2016. The production of cashew nuts reached a record high in 2016. The secondary and tertiary sectors also performed well, in particular the construction sector.

Inflation remains at low levels, in spite of the robust economic recovery. However, it is expected to increase slightly in the short term, reflecting a possible increase in international oil prices.


Chart 2.28 • External public debt

-10

-5

0

5

10

15

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(proj.)

Trade balance Official current transfersCurrent account FDIOverall balance

0%

30%

60%

90%

120%

150%

0

300

600

900

1,200

2008 2009 2010 2011 2012 2013 2014 2015

Total (USD millions) Arrears (USD millions)Total (% of GDP)

The current account balance remained positive in 2016, albeit at a lower level than in 2015. The main factor behind this is a further decline in grants, which more than offset the favourable developments in the trade balance.

External debt remains stable, at close to 30% of GDP, following the debt relief initiatives (HIPC and MDRI).



0

50

100

150

200

250

300

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015

India Senegal SingaporeMali Other Total

0

50

100

150

200

250

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015Senegal Portugal PakistanNetherlands Other Total

India continues to be the main country of destination for Guinea-Bissau’s exports, with Singapore gaining importance recently. The export sector remains highly specialised in the production of cashew nuts, which has had a good performance in the past few years.

Senegal remains the main supplier of goods to Guinea-Bissau, followed by Portugal. Together, the two countries account for more than half of the country’s purchases of goods abroad.

49

Chart 2.31 • Government revenue % of GDP

Chart 2.32 • Government expenditure % of GDP

0

10

20

30

2009 2010 2011 2012 2013 2014 2015(est.)

2016(est.)

2017(budg.)

Tax revenue Non-tax revenue Grants

05

1015202530

2009 2010 2011 2012 2013 2014 2015(est.)

2016(est.)

2017(budg.)

Compensation of employees Goods and servicesTransfers InvestmentInterest and other expend.

Tax revenue continued to benefit from the economic recovery of 2016. In turn, the performance of the other revenue components has been below expectations, to a large extent as a result of the country’s political uncertainty.

Government expenditure continues to follow a downward path, reflecting a greater cost containment effort. The contraction in external financing (in the form of grants and loans) to public investment projects explains the decline in this expenditure component.



-15

-10

-5

0

5

2009 2010 2011 2012 2013 2014 2015(est.)

2016(est.)

2017(budg.)


0%

10%

20%

30%Capital adequacy

Tier 1 ratio

Non-performingloans (% of total

loans)

Provisions (% of totalcredit)

Return on equity

Return on assets

2012 2014 2016

The public deficit increased further in 2016, mostly owing to a decline in revenue. The decline in grants of 31% from 2015 was the main factor behind these developments.

Guinea-Bissau’s financial system faces serious challenges following the reversal of the State intervention in two institutions in 2015. The level of non-performing loans remains high (19.4% at the end of the first quarter of 2017) and business profitability remains low.

Chart 2.35 • Liquidity expansion/contraction factorsChanges in % of initial stock of broad money


-25

0

25

50

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(proj.)

Net foreign assets Credit to the economyNet claims on government Other assets (net)Broad money

85

95

105

115

125

135

2009 2010 2011 2012 2013 2014 2015 2016 2017


(appreciation: +; depreciation: -)

Broad money recorded an expansion of 7.7% in 2016, mostly as a result of an accumulation of foreign exchange reserves. In spite of the economic recovery, the expansion of credit to the economy has been modest, reflecting a lack of economically viable projects.

The slight gains in nominal and real competitiveness obtained in 2016 were both the result of an appreciation of 1.2% in the Indian rupee against the CFA franc and a stronger inflationary pace in that country.

Guinea-Bissau



2012 2013 20142015 2016 2017

Est. Proj. Est. Proj. Est.

Output and pricesNominal GDP XOF billions 505.1 516.7 529.7 600.9 639.9 682.9 734.1 –

770.0 787.6 807.5 916.0 975.5 1,041.1 1,119.1 –-1.7 3.3 1.0 5.1 4.8 5.1 5.0 –1.7 -0.1 -0.1 2.4 2.5 1.6 – 0.9 Jun.2.1 0.7 -1.0 1.4 2.6 1.7 2.6 1.2 Jun.

11.5 11.4 21.7 20.8 20.7 16.4 17.3 –

13.8 13.2 24.3 23.8 22.1 21.2 19.2 –

-2.3 -1.8 -2.6 -3.0 -1.4 -4.8 -1.9 –-4.7 -5.2 -11.9 -9.7 -7.5 -8.8 -6.0 –

88.6 2.6 -28.6 422.6 – 11.2 5.5 –27.2 3.6 -20.7 13.3 – 10.5 3.6 –-6.0 14.8 29.2 25.4 – 7.7 5.0 –

4.3 4.5 3.7 3.3 – 3.5 – –9.8 9.4 9.1 8.5 – 9.1 – –

23.7 22.7 20.1 19.3 – 20.2 – –6.4 11.6 25.7 6.2 – 6.4 – –

18.0 17.9 17.5 17.5 – 16.5 – –

-41.4 20.8 11.4 63.1 -14.4 6.0 10.1 –

-19.1 2.8 22.6 19.2 1.2 8.3 13.2 –-8.4 -5.0 0.6 2.1 -1.7 0.9 -0.6 –

-10.8 -5.4 -3.9 1.0 -2.9 0.6 -0.6 –

302.7 326.0 356.7 318.6 – – – –30.6 31.2 33.3 31.4 – – – –

197.7 170.6 167.7 109.8 – – – –0.5 0.9 1.5 2.2 – – – –

656.0 656.0 656.0 656.0 – 656.0 – 656.0 Jul.

510.5 494.1 494.4 591.4 – 588.1 – 601.0 Jul.

1.3 6.3 -3.3 -2.4 – -0.4 – 1.3 Jul.

-0.5 4.5 -6.1 -2.3 – -1.0 – 0.6 Jun.

EUR millionsReal GDP Annual % changeInflation (Consumer Price Index) Year-on-year % change

Average % change

Public financesTotal revenue % of GDPTotal expenditure % of GDPOverall balance % of GDPOverall balance excl. grants % of GDP

Money and creditNet claims on government Annual % changeCredit to the economy Annual % changeBroad money (M2) Annual % change

Interest ratesDeposit, 6 months to 1 year Annual rateLending, 6 months to 1 year Annual rate

Financial stabilityCapital adequacy PercentageNon-performing loans PercentageReturn on equity Percentage

Balance of paymentsExports f.o.b. Annual % changeImports f.o.b. Annual % changeCurrent account % of GDPCurrent account excl. official transfers

% of GDP

External debtTotal stock USD millions

% of GDP% of exports(a)

Debt service % of exports(a)

Exchange ratesBilateral rate EUR/XOF (official market)

Average rate

Bilateral rate USD/XOF (official market)

Average rate

Nominal EERI (Index: 100 = 2000)(b)

Annual % change

Real EERI (Index: 100 = 2000)(b) Annual % change

Sources: BCEAO National Directorate for Guinea-Bissau, Ministry of Economy and Finance of Guinea-Bissau, National Statistics Institute of Guinea-Bissau, European Central Bank, International Monetary Fund and Banco de Portugal calculations.Notes: (a) Exports of goods and services; (b) Effective Exchange Rate Index (EERI) calculated on the basis of official exchange rates applied to the currencies of Guinea-Bissau's four main trading partners in the 2010/14 period.

51

Table 2.29 • Gross domestic productCurrent prices, billions of CFA francs

2012 2013 20142015 2016 2017

Est. Proj. Est. Proj.

Primary sector

Agriculture, forestry and fishing

Secondary sector

Agri-food

Industry(a)

Construction

Tertiary sector

Trade, restaurants and hotels

Transportation and communication


Other services

FISIM (financial intermed. servs. indirectly measured)

Gross Domestic Product (at factor cost)

Indirect taxes and subsidies

Gross Domestic Product (at market prices)

Consumption

Public

Private

Investment


Public

Private


Domestic demand


Overall demand


Memo items:



GDPmp deflator (annual % change)

Nominal GDPmp (annual % change)

Real GDPmp (annual % change)

Sources: BCEAO National Directorate for Guinea-Bissau, International Monetary Fund and Banco de Portugal calculations.Note: (a) Includes electricity and water.

236.8 228.0 217.9 233.8 242.1 – –

236.8 228.0 217.9 233.8 242.1 – –

68.4 74.5 80.1 88.1 102.5 – –

55.6 59.9 62.9 69.2 79.6 – –

8.9 8.1 9.4 10.8 13.7 – –

3.8 6.5 7.8 8.0 9.2 – –

181.4 197.0 211.0 255.9 271.1 – –

95.0 111.3 115.2 155.5 163.3 – –

26.1 26.3 26.3 27.5 30.3 – –

42.6 43.4 53.1 55.7 59.6 – –

28.5 26.2 25.8 26.9 27.8 – –

-10.9 -10.2 -9.3 -9.8 -9.8 – –

486.6 499.6 509.0 577.7 615.8 – –

18.5 17.1 20.7 23.2 24.1

505.1 516.7 529.7 600.9 639.9 682.9 734.1

519.4 520.8 548.1 584.3 642.2 – –

65.8 65.5 91.9 88.6 94.7 – –

453.6 455.4 456.2 495.7 547.6 – –

37.3 34.8 39.9 39.9 47.9 – –

33.1 29.4 34.5 34.5 42.6 – –

10.5 15.8 20.5 18.7 25.7 – –

22.6 13.7 14.0 15.9 16.9 – –

4.1 5.3 5.3 5.3 5.3 – –

556.7 555.6 588.0 624.2 690.1 – –

78.2 94.4 105.2 171.6 146.9 – –

634.8 650.1 693.2 795.8 837.1 – –

129.8 133.4 163.5 194.9 197.2 – –

-14.3 -4.2 -18.4 16.6 -2.4 – –

989.3 1,045.7 1,071.4 1,016.0 1,136.0 1,155.0 1,166.0

-0.9 -0.9 1.5 -10.2 1.6 8.1 2.4

-2.5 2.3 2.5 -5.6 6.5 13.6 7.5

-1.7 3.3 1.0 5.1 4.8 5.1 5.0

Guinea-Bissau




[1] [2] [3] [4]

2003 December

2004 December2005 December

2006 December

2007 December

2008 December

2009 December

2010 December

2011 December

2012 December

2013 December

2014 December

2015 December

2016 December

2015 January

FebruaryMarch

April

May

June

July

August

September

October

November

December

2016 January

February

March

April

May

June

July

August

September

October

November

December

2017 January

February

March

April

May

June

Sources: BCEAO National Directorate for Guinea-Bissau, National Statistics Institute of Guinea-Bissau and Banco de Portugal calculations.Notes: [1] month (n) / month (n-1); [2] month (n) / previous December; [3] month (n) / month (n) of the previous year; [4] last 12 months / previous 12 months.

– 0.7 0.7 -5.0

– 2.9 2.9 0.9

– 0.3 0.3 3.4

– 3.2 3.2 2.0

– 9.3 9.3 4.6

– 6.6 6.6 7.9

– -4.5 -4.5 -2.4

– 5.6 5.6 2.3

– 3.4 3.4 5.0

– 1.7 1.7 2.1

– -0.1 -0.1 0.7

– -0.1 -0.1 -1.0

– 2.4 2.4 1.4

– 1.6 1.6 1.7

0.1 0.1 0.3 -1.0

-1.2 -1.1 0.5 -0.7

-0.1 -1.2 0.8 -0.5

0.4 -0.8 0.4 -0.3

0.4 -0.4 0.4 -0.2

1.0 0.6 2.1 0.2

1.1 1.7 1.2 0.3

1.6 3.3 2.6 0.6

0.2 3.5 1.8 0.8

0.0 3.5 1.9 1.0

-0.3 3.2 2.2 1.2

-0.7 2.4 2.4 1.4

0.1 0.1 2.4 1.6

-1.0 -0.9 2.6 1.8

-0.4 -1.3 2.3 1.9

0.2 -1.1 2.2 2.0

0.9 -0.2 2.6 2.2

0.9 0.7 2.5 2.2

1.6 2.2 3.0 2.4

-0.8 1.4 0.6 2.2

-0.6 0.7 -0.3 2.0

0.5 1.3 0.3 1.9

0.2 1.5 0.7 1.8

0.1 1.6 1.6 1.7

-0.3 -0.3 1.1 1.6

-0.3 -0.6 1.9 1.5

-0.3 -0.9 1.9 1.5

-0.4 -1.3 1.4 1.4

0.8 -0.5 1.3 1.3

0.5 0.0 0.9 1.2

53

Table 2.31 • Balance of paymentsBillions of CFA francs

2012 2013 2014 20152016 2017

Proj. Est. Proj.

Current accountExcluding official transfers

Trade balanceExports (f.o.b.)

of wich: Cashew nutsImports (f.o.b.)

ServicesIncomeCurrent transfers

PublicPrivate

Capital and financial accountCapital account

Capital transfersFinancial account

General government – Medium / long-term loans

of which: Disbursementsof which: Amortisation

Other assets (net)of which: Foreign direct investmentof which: Other investment – Other sectors


Overall balanceFinancing

Change in official reserves (increase: - )(a)

Debt relief

Sources: BCEAO National Directorate for Guinea-Bissau, International Monetary Fund and Banco de Portugal calculations.Note: (a) Includes the effects of exchange rate fluctuations.

-42.5 -25.8 3.1 12.4 -11.2 6.3 -4.3-54.4 -27.7 -20.5 5.9 -18.3 4.0 -4.3-25.7 -14.8 -23.9 26.9 -8.3 29.7 9.867.1 75.5 82.0 149.2 127.8 162.7 179.160.0 60.9 68.1 133.6 115.2 161.1 177.4

-92.8 -90.3 -105.9 -122.3 -136.1 -133.0 -169.3-25.9 -24.2 -34.4 -55.9 -42.0 -58.8 -48.4-16.9 -4.0 18.5 15.0 8.6 13.8 14.026.0 17.1 42.9 26.4 30.5 21.6 20.311.9 1.9 23.6 6.5 7.1 2.3 0.014.1 15.3 19.3 19.9 23.4 19.3 20.3

14.1 31.7 51.7 33.3 23.4 -9.3 27.0

15.9 15.8 27.4 35.4 28.1 27.4 30.315.9 15.8 27.4 35.4 28.1 27.4 30.3-1.8 15.9 24.3 -2.1 -4.7 -36.7 -3.37.6 12.4 10.2 9.0 11.9 10.2 14.4

7.6 12.5 13.1 10.0 13.3 13.5 15.4-0.0 -0.1 -2.9 -1.0 -1.4 -3.3 -1.0-9.3 3.5 14.1 -11.1 -16.6 -46.8 -17.73.5 9.7 12.9 10.6 13.2 10.1 8.9

-12.8 -6.2 1.2 -21.7 -30.0 -56.9 -26.6-4.8 5.0 6.1 -6.5 0.0 -3.5 0.0

-33.2 10.9 60.9 39.3 12.2 -6.4 22.6

33.2 -10.9 -60.9 -39.3 -12.2 6.4 -22.6

33.2 -10.9 -63.9 -39.3 -12.2 6.4 -22.6

0.0 0.0 3.0 0.0 0.0 0.0 0.0

Guinea-Bissau


Table 2.32 • Goods exportsBy country of destination, as a percentage of total

2010 2011 2012 2013 2014 2015 2010 to 2015

ChinaCôte d'Ivoire

India

Mali

Portugal

Senegal

Singapore

Togo

VietnamOther

Sources: BCEAO National Directorate for Guinea-Bissau and Banco de Portugal calculations.

Table 2.33 • Goods importsBy country of origin, as a percentage of total

2010 2011 2012 2013 2014 2015 2010 to 2015

Brazil 3.4 2.5 1.3 1.0 0.8 0.8 1.6

1.3 0.4 0.4 0.2 0.3 0.3 0.5

1.3 2.8 1.8 1.9 3.9 3.3 2.6

8.2 5.0 3.3 0.7 1.3 0.9 3.2

4.0 3.5 3.3 3.5 3.6 3.4 3.6

2.0 1.4 5.4 4.9 5.0 7.3 4.4

24.0 32.0 33.0 25.5 21.5 23.2 26.4

28.8 22.6 34.4 44.6 41.2 32.4 33.6

0.8 1.0 0.1 0.1 0.5 1.0 0.6

26.2 28.8 17.0 17.6 22.0 27.3 23.6

Côte d'Ivoire

France

Netherlands

Pakistan

Portugal

Senegal

Spain

Thailand

Other

Sources: BCEAO National Directorate for Guinea-Bissau and Banco de Portugal calculations.

Table 2.34 • External public debt USD millions

2011 2012 2013 2014 2015

Medium and long-term debt 292.0 301.7 325.0 355.7 317.7

113.7 135.0 152.7 183.6 173.8178.2 166.7 172.2 172.1 143.9

1.1 1.1 1.0 1.0 0.8

293.1 302.7 326.0 356.7 318.6

8.1 7.6 7.9 7.9 8.30.9 0.8 1.6 3.2 6.40.6 0.6 0.6 0.6 2.90.3 0.2 1.1 2.6 3.6

Multilateral creditorsBilateral creditors

Short-term debt

Total external debtof which: Arrears

Scheduled medium and long-term debt servicePrincipalInterest

(% of exports of goods and services)Total external debt 104.9 197.7 170.6 167.7 109.8

0.3 0.5 0.9 1.5 2.20.2 0.4 0.3 0.3 1.00.1 0.1 0.6 1.2 1.2

Scheduled medium and long-term debt servicePrincipalInterest

(% of GDP)Total external debt 27.0 30.6 31.2 33.3 31.4

Sources: BCEAO National Directorate for Guinea-Bissau, International Monetary Fund and Banco de Portugal calculations.

0.9 0.7 0.8 1.7 2.7 14.2 4.80.0 0.5 0.4 2.8 0.0 0.0 0.6

57.2 66.4 68.7 52.5 60.0 51.2 58.6

8.9 6.3 10.5 8.3 10.8 0.0 6.4

1.7 0.7 0.1 0.1 1.0 0.0 0.5

26.2 16.3 5.4 4.8 4.6 2.5 9.0

0.8 6.7 5.5 9.5 8.5 14.5 8.7

0.0 0.0 5.4 8.4 0.0 0.0 1.8

0.0 0.3 0.0 7.3 3.6 5.9 3.2

4.2 2.1 3.2 4.6 8.7 11.7 6.4

55

Table 2.35 • Government operationsBillions of CFA francs

2012 2013 20142015 2016 2017

Est. Budg. Est. l.e.(a) Proj.

1. Total revenue1.1.Current revenue

Non-tax revenue

Tax revenue

1.2. Grants

of which: Projects

of which: Budget support

2. Total expenditure 2.1. Current expenditure


Goods and services

Transfers

Scheduled debt interest

Other expenditure

2.2. Capital expenditure

Domestic financing

External financing

3. Current balance: (1.1.) - (2.1.)

4. Overall balance excl. grants: (1.) - (2.) - (1.2.)

5. Overall balance: (1.) - (2.) (commitment basis)

6. Change in arrears6.1. Domestic

6.2. External

7. Items in transit, errors and omissions

8. Overall balance: (5.) + (6.) + (7.) (cash basis)

9. Financing9.1. Domestic (net)

of which: Banking system

9.2. External (net)

of which: Disbursements

of which: Amortisation

of which: Debt relief

10. Financing gap(b)

Sources: BCEAO National Directorate for Guinea-Bissau, Ministry of Economy and Finance of Guinea-Bissau, International Monetary Fund and Banco de Portugal calculations.Notes: (a) Level of budget execution: as a percentage of budgeted amounts; (b) Net borrowing (-) / net lending (+).

58.1 58.9 115.0 125.0 132.3 112.0 84.7 127.1

46.0 41.1 65.5 84.8 93.1 84.3 90.5 97.1

7.1 5.7 21.4 22.9 24.3 20.8 85.6 28.4

38.9 35.4 44.2 61.9 68.8 63.5 92.3 68.6

12.1 17.8 49.5 40.1 39.2 27.6 70.4 30.1

3.1 13.8 26.2 34.5 27.9 27.4 98.2 30.1

9.1 4.0 23.3 5.6 11.3 0.3 2.7 0.0

69.5 68.0 128.7 143.3 141.3 144.5 102.3 141.2

62.3 49.7 89.2 93.7 90.0 102.0 113.4 93.8

25.1 24.3 32.3 31.8 34.6 34.8 100.6 34.9

12.8 9.0 11.0 16.2 – 12.0 – 15.3

12.8 12.6 14.5 18.9 17.8 28.3 159.0 28.8

0.1 0.4 2.7 4.6 3.2 5.1 161.5 3.1

11.4 3.5 28.7 22.1 34.4 21.9 63.7 11.7

7.2 18.3 39.5 49.5 51.3 42.5 82.8 47.4

0.7 0.0 0.2 4.9 – 1.6 – 2.0

6.5 18.3 39.2 44.6 – 40.9 – 45.4

-16.3 -8.6 -23.7 -8.9 3.1 -17.7 – 3.3

-23.5 -26.9 -63.1 -58.4 -48.2 -60.1 – -44.2

-11.4 -9.2 -13.7 -18.3 -9.0 -32.5 – -14.1

3.5 9.7 -1.8 -6.1 0.0 -1.5 – -4.4

3.5 9.7 -1.8 -5.2 0.0 -2.1 – -3.8

0.0 0.0 0.0 -0.9 0.0 0.6 – -0.6

-5.8 -9.9 -0.7 1.6 0.0 5.5 – 2.0

-13.7 -9.4 -16.2 -22.7 -9.0 -28.5 – -16.5

13.7 9.4 16.2 22.7 8.3 28.5 – 16.5

9.0 4.9 3.4 13.8 -3.6 19.0 – 5.1

9.0 4.9 3.4 13.8 -3.6 19.0 – 5.1

4.6 4.5 12.8 8.9 11.9 9.5 – 11.4

5.1 4.6 13.1 10.0 30.4 13.5 – 15.4

-0.5 -0.1 -3.3 -1.1 -18.5 -4.0 – -3.9

0.0 0.0 3.0 0.0 0.0 0.0 – 0.0

0.0 0.0 0.0 0.0 -0.7 0.0 – 0.0

Guinea-Bissau


Table 2.36 • Monetary surveyBillions of CFA francs

2012 2013 2014 20152016 2016/2015 2017 2017/2016

Est. [1] [2] Proj. [1] [2]

Net foreign assetsCentral Bank

Commercial banks

Total domestic credit

Net claims on government

Credit to the economy

Other assets (net)

Total assets

Broad money (M2)

Currency in circulation

Deposits

Total liabilities

Sources: BCEAO National Directorate for Guinea-Bissau, International Monetary Fund and Banco de Portugal calculations.Notes: [1] Percentage change from the end of the previous year; [2] Changes in percentage of initial stock of broad money (liquidity expansion/contraction factors).


2012 2013 2014 2015 2016


Deposits

4.5 4.8 4.8 4.8 4.3

4.9 4.7 4.6 4.7 4.75.1 3.7 4.3 4.2 3.64.3 4.5 3.7 3.3 3.5

4.5 4.6 4.5 3.3 3.6

2.7 5.3 4.5 3.5 5.3

3.5 5.0 – – –

– 4.3 3.6 3.5 3.7

11.6 9.7 11.5 11.1 8.7

1.4 9.9 9.5 9.1 8.0

10.0 9.9 9.5 9.5 8.8

9.8 9.4 9.1 8.5 9.1

9.5 9.1 9.3 10.1 10.6

7.9 9.0 9.4 9.8 10.6

9.6 8.7 5.9 8.7 8.4

5.5 3.1 7.6 7.8 3.0

3.0 2.5 2.5 2.5 2.5

5.0 5.0 5.0 5.0 5.0

1.7 -0.1 -0.1 2.4 1.6

Up to 1 month

1 to 3 months

3 to 6 months

6 months to 1 year

1 to 2 years

2 to 5 years

5 to 10 years

Not determined

CreditUp to 1 month

1 to 3 months

3 to 6 months

6 months to 1 year

1 to 2 years

2 to 5 years

5 to 10 years

Over 10 years

Central Bank operationsBanking system

Discount rate

Reserve ratio

Memo item:

Inflation (y-o-y % change)

Sources: BCEAO National Directorate for Guinea-Bissau and International Monetary Fund.

84.5 94.9 151.8 167.4 202.1 20.7 11.5 224.8 11.2 7.0

65.0 72.1 120.3 159.5 153.1 -4.0 -2.1 175.8 14.8 7.0

19.5 22.8 31.6 7.9 49.0 520.3 13.6 49.0 0.0 0.0

85.4 88.3 68.3 140.8 156.2 10.9 5.1 163.6 4.7 2.3

21.1 21.7 15.5 81.0 90.1 11.2 3.0 95.1 5.5 1.5

64.2 66.6 52.8 59.8 66.1 10.5 2.1 68.5 3.6 0.7

-7.1 3.8 21.3 -5.3 -31.9 – -8.8 -45.8 – -4.3

162.8 186.9 241.5 302.9 326.3 7.7 – 342.6 5.0 –

162.8 186.9 241.5 302.9 326.3 7.7 – 342.6 5.0 –

83.4 90.9 151.9 194.6 224.8 15.5 – 236 5.0 –

79.4 96.0 89.5 108.3 101.6 -6.2 – 106.6 4.9 –

162.8 186.9 241.5 302.9 326.3 7.7 – 342.6 5.0 –

57


2012 2013 2014 2015 2016


SolvencyCapital adequacy

Tier 1 ratio

Credit risk

Non-performing loans (% of total loans)

Provisions (% of total credit)

Profitability

Return on equity

Return on assets

Liquidity risk

Loan-to-deposit ratio

Deposit-to-asset ratio

Liquid assets to total assets

Sources: BCEAO National Directorate for Guinea-Bissau and International Monetary Fund.Note: Indicators for 2015 and 2016 do not yet reflect the reversal of the two bank bailouts that occurred in 2015.

23.7 22.7 20.1 19.3 20.2

22.3 23.1 21.4 13.9 –

6.4 11.6 25.7 6.2 6.4

10.7 11.6 19.0 8.9 4.2

18.0 17.9 17.5 17.5 16.5

2.6 2.9 2.9 2.9 2.8

78.9 72.5 82.0 76.5 72.4

45.9 56.2 59.2 45.7 43.3

34.3 25.2 34.0 26.8 17.0

Guinea-Bissau



EERI(a) Index: 100 = 2000

EUR/XOF USD/XOF INR/XOF Nominal Real

20032004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2015 January

February

March

April

May

June

July

August

September

October

November

December

2016 January

February

March

April

May

June

July

August

September

October

November

December

2017 January

February

March

April

May

June

July

Sources: BCEAO National Directorate for Guinea-Bissau, European Central Bank, International Monetary Fund and Banco de Portugal calculations.Notes: (a) Effective exchange rate index (EERI), calculated on the basis of official exchange rates applied to the currencies of Guinea-Bissau's four main trading partners in the 2010/14 period. An increase/decrease in the EERI (nominal or real) corresponds to an appreciation/depreciation of the CFA franc.

656.0 581.5 12.5 109.1 99.5656.0 528.3 11.7 111.9 101.0

656.0 527.6 12.0 110.8 100.4

656.0 523.1 11.6 112.2 100.0

656.0 479.5 11.6 112.0 99.5

656.0 448.2 10.3 116.9 105.5

656.0 472.2 9.8 119.4 101.7

656.0 495.0 10.8 114.9 95.3

656.0 477.5 10.1 117.8 97.0

656.0 510.5 9.6 120.2 96.7

656.0 494.1 8.5 125.7 98.5

656.0 494.4 8.1 127.7 96.8

656.0 591.4 9.2 121.8 91.7

656.0 593.0 8.8 123.8 92.9

656.0 564.5 9.1 122.5 93.0

656.0 577.9 9.3 121.4 91.2

656.0 605.2 9.7 119.7 89.5

656.0 608.6 9.7 119.6 89.5

656.0 588.3 9.2 121.8 91.1

656.0 585.0 9.2 122.1 91.6

656.0 596.5 9.4 121.1 91.4

656.0 588.9 9.0 122.7 93.6

656.0 584.6 8.8 123.8 93.9

656.0 583.9 9.0 123.1 92.5

656.0 611.0 9.2 121.8 91.7

656.0 603.1 9.1 122.6 92.2

656.0 604.0 9.0 123.1 93.3

656.0 591.3 8.7 124.7 93.9

656.0 591.0 8.8 123.8 92.6

656.0 578.5 8.7 124.4 93.1

656.0 579.9 8.7 124.6 93.7

656.0 584.2 8.7 124.6 93.7

656.0 592.6 8.8 123.8 94.2

656.0 585.1 8.7 124.2 93.1

656.0 585.1 8.8 124.1 92.0

656.0 594.9 8.9 123.4 91.6

656.0 607.4 9.0 123.0 92.0

656.0 622.2 9.2 122.1 91.4

656.0 618.0 9.1 122.6 92.0

656.0 616.3 9.2 121.9 91.3

656.0 613.9 9.3 121.3 90.2

656.0 611.7 9.5 120.6 89.4

656.0 593.2 9.2 121.9 91.2

656.0 584.2 9.1 122.6 91.9

656.0 569.9 8.8 123.7 –

2.4. MozambiqueArea: 799,380 Km2

Capital city: Maputo


Currency: Metical (MZN)

Growth slowed in Mozambique in 2016, mainly due to the fall in gross fixed capital formation. The current account deficit decreased year-on-year, as a result of tightened monetary policy, the fall in imports for large foreign investment projects and the favourable context for coal exports. Interventions by Banco de Moçambique led to an appreciation in the metical, the containment of inflation and a considerable increase in the stock of official reserves. In 2017, the central bank is expected to restate its commitment to containing inflation, while risks from public debt and fiscal policy are expected. The contractual formalisation of planned investments in gas exploitation infrastructure has opened up important positive prospects.


Economic growth in Mozambique slowed in 2016 (to 3.8%), however it is expected to accelerate in 2017 (rising to 4.7%). In 2016, financial intermediation continued to make a marked negative contribution to growth, with motor vehicle distribution and maintenance services making the largest positive contribution. On the demand side, the fact that changes in inventories were the main driver of growth reflects the economic slowdown prevailing in 2016. Despite the deceleration of growth compared to the preceding years, the Mozambican economy continues to grow at above the average rate for Sub-Saharan Africa (1.4% in 2016 and 2.6% for 2017).

Gross fixed capital formation continued to decrease sharply, falling 30% (in real terms) in 2016 (-23% in 2015), contributing more to the slowdown in GDP than any other expenditure component.

The IMF's support to the country has been suspended, following the disclosure of previously unknown public debt stocks. The recent disclosure by the Prosecutor General of the Republic of Mozambique, giving the conclusions of the audit on those debts, undertaken in the interim, was a necessary (but insufficient) condition for conversations about resumption of the Fund's support to restart. The IMF welcomed the conclusions of the audit as published, noting however that some information was yet to be provided.

The sharp depreciation of the metical – against the US dollar, the euro and the South African rand – was accompanied by a pronounced hike in the year-on-year inflation rate, from the end of 2015. This rate stabilised at around 21% in the first months of 2017.

The tightened monetary policy cycle introduced by Banco de Moçambique in October 2015, with a view to correcting the adverse conditions of the foreign exchange market, stopping further loss of reserves and containing the rise in inflation, had a strong push in October 2016, followed by an apparent suspension. The lending facility rate and the deposit rate have stabilised since the last few months of 2016.

Monetary expansion, which had accelerated to 26.1% in 2015, slowed in 2016 to 10% and was followed by monetary contraction in the first months of 2017, reflecting the objectives of the tightened policy adopted. The recent centralisation of monetary policy in the new monetary policy interest rate (MIMO) and Banco de Moçambique's strong commitment to reducing inflation won positive reactions.

The financial stability indicators show some signs of vulnerability, in terms of the fall in capitalisation levels and the banking system's loss of profitability, both showing signs of recovery in the first few months of this year, along with the increase in non-performing loans, which intensified at the start of 2017.

The monetary tightening at the end of 2016 produced an appreciation in the metical against the US dollar, which extended through the first half of 2017, resulting in an increase of 27 per cent versus September 2016.

In 2016, the combined effects of the tightened monetary policy, the continued reduction in imports for large foreign investment projects, the increase in the international coal price and the increase in coal exports by volume, contributed to the contraction of the Mozambican current account deficit by around 30%. In turn, this improvement led to the preservation of international reserves, which, nevertheless, fell to 2.3 months of imports at the end of 2016.

Despite the increase in public revenue, the State's fiscal deficit intensified in 2016, by 1.6 percentage points of GDP, approaching 2012 levels. The fiscal expansion was caused mainly by increased expenditure on employees and interest, while the removal of subsidies on wheat and fuels represented a containment measure.

The State's debt continued to grow in 2016, reaching 102% of GDP at the end of the year (compared to 73% at the end of 2015). The debt stocks revealed in 2016 represented over 150% of the overall increase of debt in that year. The external debt component, which grew by 28 percentage points of GDP, remains the main driver of this increase in public debt,

61

representing 88% of total debt at the end of 2016. The need for fiscal consolidation is one of the key messages among the conclusions of the IMF's most recent visit to Mozambique (July 2017), given the risks still posed by the high stock of debt, materialised thereafter in the Mozambican State's recent defaults.

For 2017, the pace of growth is expected to pick up again (from 3.8% to 4.7%), inflation should fall and the current account balance should improve. However, key risks remain. Aside from the vulnerabilities in the public finances, reflected for example in the deficit growth assumed in the 2017 Budget, the legal consequences of the audit report on the hidden public debt may also create instability in economic policy and more widely in the Mozambican economy. If, on the other hand,

the measures taken following that investigation do not lead to complete transparency and credibility in fiscal policy, the climate of uncertainty may intensify. A positive risk arises from the possible start of construction of natural gas exploitation infrastructure in the Rovuma basin. In June 2017, the Government and exploration companies signed the contracts allowing work to start. Although production should only start within five years, the signing of these contracts is an important signal that the project will go ahead and paves the way for investments with the potential to create further economic activity. The foreign direct investment flows may, in turn, lead to an improvement in the balance of payments.


2014 2015 2016 2017

Est. Proj.

Real GDP (anual % change) 7.4 6.6 3.8 4.7

1.1 11.1 23.7 13.5

22.2 26.1 10.1 –

-33.5 -38.6 -38.0 -34.8

3.9 3.0 2.3 2.0

-7.8 -1.9 -3.5 -9.0

48.4 73.1 101.8 106.9




Official reserves (months of imports(1))

Fiscal balance (% of GDP)Public debt (% of GDP)

Sources (for the subsequent charts also): International Monetary Fund, Banco de Moçambique, Mozambique National Planning and Budget Directorate and Mozambique National Institute of Statistics.(1) For the following year.

Mozambique


Chart 2.37 • Real GDPAnnual % change


0

2

4

6

8

10

2009 2010 2011 2012 2013 2014 2015 2016 2017(proj.)

Mozambique Sub-Saharan Africa

-5

0

5

10

15

20

25

30

2009 2010 2011 2012 2013 2014 2015 2016 2017


Mozambique has consistently achieved a growth pace above the average for the region since 2011.

Monetary tightening and the consequent appreciation of the metical against the US dollar may have contributed to the apparent inversion in inflation at the end of 2016, interrupting the sharp rise since 2015.


Chart 2.40 • Foreign exchange reserves Months of goods and services imports

-50

-40

-30

-20

-10

0

10

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(proj.)

Trade balance Current account balanceOverall balance

0

1

2

3

4

5

6

7

8

2009 2010 2011 2012 2013 2014 2015 2016 2017(proj.)Months of total imports

Months of imports excl. large-scale proj.

In 2016, the tightened monetary policy, the continued reduction in imports associated with large foreign investment projects and the increase in coal exports contributed to the improvement of Mozam-bique's external accounts.

The improvement in the external accounts, in turn, contributed to the maintenance of international reserves, which represent an increasing share of imports, after excluding those associated to large foreign in-vestment projects.



05001,0001,5002,0002,5003,0003,5004,0004,500

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015 2016

Other Netherlands India China South Africa Total

01,0002,0003,0004,0005,0006,0007,0008,0009,000

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015 2016

Other Singapore United Arab Emirates China South Africa Total

In 2016, India became one of the three largest Mozambican export markets, along with South Africa and the Netherlands.

South Africa and China remain the main origin markets for Mozambican imports, with the United Arab Emirates and Singapore increasing their shares in 2016.

63


Chart 2.44 • Public debt % of GDP

-15

-10

-5

0

5

10

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(budget)


0

50

100

150

2009 2010 2011 2012 2013 2014 2015 2016(est.)

External - Multilateral External - BilateralDomestic - Treasury bonds Domestic - Other credit

Despite the current balance remaining consistently positive from 2010, capital expenditure fluctuations continue to have a strong impact on Mozambique's public accounts.

The increase in Mozambican public debt over the last few years was reflected chiefly in the external component, which equated to almost 90% of GDP at the end of 2016.

Chart 2.45 • Public revenue and expenditure Chart 2.46 •% of GDP


-50-40-30-20-100

10203040

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(budget)

Exp: Invest. Exp: Net loans Exp: OtherExp: Sched. interest Exp: Goods and serv. Exp: EmployeesRev: Grants Rev: Other taxes Rev: Non-taxRev: Cons. taxes Rev: Inc. taxes

Reve

nue

Expe

nditu

re

0%

10%

20%

30%

40%Capital adequacy

Liquid assets(% of total assets)

ROE

ROA

NPL(% of total loans)

Cred. in foreigncurrency

(% total credit)

2012 2014 2016

Developments in the fiscal deficit were driven by the public invest-ment effort, the compensation of employees and tax revenue.

In 2016, the financial stability indicators showed some signs of vulnera-bility, through the fall in capitalisation levels, the increase in non-performing loans and the banking system's loss of profitability.



-20-100

1020304050

2009 2010 2011 2012 2013 2014 2015 2016(est.)

2017(May)

External position Net claims on gen.l gov.Credit to the econ. Other net assetsBroad money

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013 2014 2015 2016 2017


(appreciation: +; depreciation: -).

The tightening typifying monetary policy at the end of 2016 led to a strong slowdown of broad money in the course of that year and even to a decline in the first few months of 2017.

The developments in effective exchange rates reflect the metical's nom-inal and real appreciation from 2016, probably resulting in part from the tightened monetary policy at the end of that year.

Mozambique



2012 2013 2014 2015 2016 2017

Est. Est. Est. Est. Proj. Est. Proj. Est.

Output and pricesNominal GDP EUR millions

Real GDP Annual % change

Inflation (Consumer Price Index)

Year-on-year % changeAverage % change



Overall balance % of GDP

Overall balance excluding grants % of GDP

Money and creditNet claims on general government

Annual % change



Interest ratesDeposit (1-year) Annual rate

Lending (1-year) Annual rate

Financial stabilityCapital adequacy (a) Percentage

Non-performing loans(b) / total loans

Percentage

Return on equity (ROE) Percentage

Balance of paymentsGoods exports (in USD) Annual % change

Goods imports (in USD) Annual % change


Current account excl. official transfers

% of GDP

Official reserves Months of imports(d)

Months of imports(e)

Public debt

External debt EUR millions

% of GDP

% of exports(f)

Domestic debt EUR millions

% of GDP

Exchange ratesEUR/MZM (official market) Average rate

USD/MZM (official market) Average rate

USD/MZM (parallel market) Average rate

Nominal EERI (Index: 100 = 2000)(c)

% change(g)

Real EERI (Index: 100 = 2000)(c) % change(g)

Sources: Banco de Moçambique, International Monetary Fund, Organisation for Economic Co-operation and Development, Mozambique National Planning and Budget Directorate, Mozambique National Institute of Statistics and Banco de Portugal calculations.Notes: (a) Regulatory capital/risk-weighted assets; (b) Up to 2013, the calculation of non-performing loans used a definition which did not include all impaired loans; (c) Effective exchange rate index (EERI) calculated on the basis of official exchange rates applied to the currencies of Mozambique's four main trading partners in the 2010/14 period (appreciation: +; depreciation: -); (d) Of goods and services for the following year; (e) Of goods and services, excluding large-scale projects; (f) Of goods and services; (g) Change from the previous December.

12,014 12,144 13,043 13,953 9,732 9,966 10,623 –

7.2 7.1 7.4 6.6 6.5 3.8 7.2 –

2.2 3.0 1.1 11.1 5.6 23.7 5.6 20.5 May

2.1 4.2 2.3 2.4 5.6 19.9 5.6 22.3 May

29.0 32.5 33.9 29.5 26.8 26.2 25.0 –

32.9 37.0 41.8 31.4 35.4 29.7 33.9 –

-3.8 -4.6 -7.8 -1.9 -8.7 -3.5 -9.0 –

-10.1 -10.8 -12.4 -5.0 -11.3 -5.7 -10.7 –

98.5 -16,284.0 36.6 361.6 -135.2 78.2 – -19.2 May(g)

19.9 28.7 28.3 19.3 12.9 12.6 – -6.9 May(g)

29.4 16.3 22.2 26.1 7.9 10.1 – -5.6 May(g)

11.5 9.1 9.1 9.4 – 12.7 – 17.2 May

21.4 20.3 20.8 19.1 – 28.0 – 28.6 May

17.9 16.9 15.1 17.0 – 8.8 – –

3.2 2.9 3.2 4.3 – 5.5 – –

19.6 21.0 21.6 20.4 – 10.1 – –

–

23.6 6.9 -5.0 -12.8 6.7 -2.5 – –

47.2 7.3 -6.2 -4.7 3.8 -37.5 – –

-40.8 -38.8 -33.5 -38.6 -33.1 -38.0 -34.8 –

-45.4 -45.5 -39.7 -42.1 -39.5 –

2.7 3.3 3.9 3.0 2.8 2.3 2.0 –

4.2 4.9 4.8 4.2 4.8 4.5 4.9 –

3,684 4,221 5,711 6,751 – 8,014 – –

33.1 35.9 41.9 61.4 – 89.1 – –

97.4 121.3 151.7 177.5 – 224.7 – –

611 725 894 1288 – 1145 – –

5.5 6.2 6.5 11.7 – 12.7 – –

36.1 39.7 40.8 42.4 – 69.2 – 67.9 Jun.

28.1 29.9 30.7 38.3 – 62.6 – 60.5 Jun.

29.5 31.5 32.9 42.1 – 67.3 – 63.5 Jun.

-6.2 8.0 0.7 -22.2 – -32.7 – 13.1 May

-8.7 6.7 -1.6 -16.5 – -22.1 – 16.8 May

65

Table 2.42 • Gross domestic productCurrent prices, MZM millions

2011 2012 2013 2014 2015 2016 2017

Est. Est. Proj.

Primary sector

Agriculture and livestock

Fishing

Secondary sector


Manufacturing

Electricity and water

Construction

Tertiary sector

Trade and repairs

Restaurants and hotels

Transport and storage

Information and communication

Financial services

Real estate, renting


Education

Healthcare and social work

Other

Gross Domestic Product (at factor costs)

Indirect taxes

Gross Domestic Product (market prices)

Consumption

Public

Private

Investment

Gross Fixed Capital Formation

Changes in inventory

Domestic demand


Overall demand


Memo items:



GDPmp deflator (annual % change)Nominal GDPmp (annual % change)Real GDPmp (annual % change)

Sources: Banco de Moçambique, Mozambique National Institute of Statistics, International Monetary Fund and Banco de Portugal calculations.

100,369 109,287 116,129 120,982 135,754 155,412 –

94,128 102,491 108,734 113,213 126,251 138,821 –

8,428 13,081 15,230 23,894 30,309 42,957 –

67,760 75,492 81,860 99,790 116,236 135,777 –

8,428 13,081 15,230 23,894 30,309 42,957 –

39,299 39,413 41,591 47,821 53,917 59,806 –

12,085 13,841 16,301 17,116 18,296 18,614 –

7,948 9,158 8,737 10,960 13,714 14,399 –

183,301 210,489 239,075 262,154 286,791 336,186 –

39,123 47,427 56,305 61,523 66,501 83,545 –

10,779 9,516 10,134 10,973 12,999 13,504 –

30,339 35,746 43,075 39,781 41,274 47,196 –

13,787 15,252 16,494 17,858 19,051 19,880 –

18,113 19,812 22,442 24,459 27,436 33,754 –

26,054 28,598 31,498 31,124 34,098 36,776 –

19,324 21,662 25,271 31,291 37,462 44,381 –

25,806 31,314 33,972 42,271 46,821 56,163 –

6,137 7,624 7,922 10,497 11,296 13,593 –

-6,161 -6,461 -8,038 -7,623 -10,145 -12,605 –

351,430 395,269 437,064 482,926 538,782 627,375 –

30,262 37,853 45,169 48,851 52,895 61,838 –

381,692 433,121 482,233 531,777 591,677 689,213 793,036

365,713 427,472 478,223 510,726 558,828 687,405 –

76,137 90,282 115,101 138,592 157,807 194,588 –

289,576 337,190 363,123 372,134 401,021 492,817 –

97,969 205,222 262,667 294,406 268,182 293,999 270,140

82,232 152,145 189,791 228,937 189,089 141,505 –

15,738 53,076 72,875 65,469 79,092 152,494 –

463,683 632,694 740,890 805,132 827,010 981,404 –

127,587 140,228 146,451 177,397 190,616 239,554 –

591,270 772,922 887,341 982,529 1,017,626 1,220,958 –

209,578 339,800 405,108 450,752 425,947 531,745 –

15,978 5,649 4,010 21,051 32,849 1,808 –

13,135 15,415 16,123 17,327 15,457 11,015 11,170

3.3 5.9 3.9 2.6 4.4 12.2 10.0

10.7 13.5 11.3 10.3 11.3 16.5 15.1

7.1 7.2 7.1 7.4 6.6 3.8 4.7

Mozambique



Monthly change Year-on-year change Average change

[1] [2] [3]

2005 December

2006 December

2007 December

2008 December

2009 December

2010 December

2011 December

2012 December

2013 December

2014 December

2015 December

2016 December

2015 January

February

March

April

May

June

July

August

September

October

November

December

2016 January

February

March

April

May

June

July

August

September

October

November

December

2017 January

February

March

April

May

Sources: Banco de Moçambique, Mozambique National Institute of Statistics and Banco de Portugal calculations.Notes: [1] month (n) / month (n-1); [2] month (n) / month (n) of the previous year; [3] last 12 months / previous 12 months.

3.9 13.1 7.0

2.2 8.1 13.6

3.2 12.1 9.2

0.9 11.8 14.5

2.1 4.2 3.3

3.5 16.6 12.7

1.3 5.5 10.4

1.0 2.2 2.1

0.6 3.0 4.2

0.6 1.1 2.3

5.8 11.1 2.4

2.5 23.7 19.9

1.6 1.5 2.2

1.2 2.1 2.1

0.2 0.8 1.9

-0.6 -0.5 1.6

-0.9 -0.8 1.2

-0.4 0.1 1.0

0.1 0.7 0.9

0.0 1.8 0.9

0.1 2.4 1.0

1.7 4.1 1.2

2.0 5.7 1.6

5.8 11.1 2.4

4.8 13.8 4.5

1.0 13.1 5.3

0.3 13.4 6.1

1.4 16.1 7.3

0.3 17.7 8.7

0.8 19.1 10.2

1.2 20.4 11.7

1.8 22.2 13.4

3.3 25.9 15.3

2.4 26.3 17.1

1.9 26.4 18.8

2.5 23.7 19.9

2.2 20.6 20.4

1.3 20.9 21.1

0.9 21.6 21.7

1.1 21.3 22.1

-0.4 20.5 22.3

67


2012 2013 2014 2015 2016 2017

Prog. Est. Prog. Q 1

Current account -6,284 -6,253 -5,797 -5,968 -4,901 -4,191 -3,887 -718

-6,997 -7,341 -6,884 -6,508 – -4,349 – -745

-4,048 -4,357 -4,035 -4,163 -4,219 -1,405 – -371

3,856 4,123 3,916 3,413 3,643 3,328 – 977

2,190 2,196 2,440 2,057 2,069 2,413 – 824

-7,903 -8,480 -7,952 -7,577 -7,863 -4,733 – -1,348

-2,143 -1,934 -1,487 -917 -2,058 -771 – -164

-3,073 -3,259 -2,932 -2,306 -1,231 -2,841 – -310

7 -59 -202 -300 -344 -255 – -132

-40 -49 -60 -128 -101 -127 – -116

-48 -42 -46 -13 -82 -18 – -5

829 1,421 1,372 802 894 310 – 95

713 1,088 1,087 540 – 158 – 27

538 460 568 441 442 – – –

116 333 285 262 – 151 – 67

456 423 375 288 368 139 – 43

-5,541 -5,418 -5,579 -6,175 -4,901 -4,543 – -318

-5,215 -6,175 -4,902 -3,867 -3,188 -3,093 – -457

-87 22 -23 26 0 50 – 43

-373 -391 134 521 368 540 – -314

373 391 -134 -521 -368 -540 – 314

375 393 -120 -600 -335 -501 – 67

-2 -3 -14 79 -33 -39 – -10

-2 -3 -14 79 -33 -39 – -10

0 0 0 0 0 0 – 257

Excluding official transfers

Trade balance

Exports (f.o.b.)

of which: Large-scale projects

Imports (f.o.b.)

of which: Large-scale projects

Services

Balance of primary income

of which: Public debt interest (debit)(a) Dividends and interest from large-scale projects

Balance of secondary income

Central government

of which: External grants(a)

Financial & non-financial inst., households & NPISHs

Capital account

Financial account

of which: Foreign direct investment (net)


Overall account

Financing (b)

Change in official reserves

Use of credit (net)(b)

of which: Use of IMF funds (net)(b)

Exceptional financing

Sources: Banco de Moçambique, IMF and Banco de Portugal calculations.Notes: Banco de Moçambique started to report these data in line with the Sixth Edition of the IMF's Balance of Payments and International Investment Position Manual. (a) The 2015 value is an estimate. (b) Includes disbursements in Special Drawing Rights.

Mozambique



2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 to 2016

South Africa 9.2 21.4 21.6 18.7 19.8 19.7 24.2 20.9 21.0 19.8 0.5 0.7 0.4 0.6 1.1 1.2 1.4 2.6 1.4 1.2 1.6 3.5 3.9 5.4 18.2 2.5 5.2 3.9 4.3 5.7 0.5 1.9 0.9 0.8 2.5 3.6 1.4 1.7 2.9 1.9 1.3 1.5 1.7 2.7 1.5 1.8 1.5 0.8 2.0 1.6 0.8 2.6 1.5 1.8 4.5 16.5 9.9 9.4 20.1 8.3

55.5 41.6 51.0 43.5 24.1 27.3 28.4 27.9 25.3 34.2 0.8 1.5 4.7 1.4 0.5 2.5 1.4 0.9 1.0 1.5 2.1 3.4 3.2 2.5 2.4 2.0 2.5 2.6 1.3 2.4 0.1 1.3 0.5 0.3 1.8 0.0 1.9 4.2 4.2 1.6

27.6 20.5 10.7 22.3 23.6 23.1 22.4 25.2 16.4 21.7

BelgiumChinaUnited StatesSpainIndiaNetherlandsPortugalZimbabweSingaporeOther

Sources: Banco de Moçambique and Banco de Portugal calculations.

Table 2.46 • Goods importsOrigins as a percentage of total imports

2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 to 2016

South AfricaGermanyChinaUnited StatesUnited Arab EmiratesIndiaNetherlandsPortugalUnited KingdomSingapore

Other

Sources: Banco de Moçambique and Banco de Portugal calculations.

29.1 35.5 51.2 34.0 27.2 25.7 36.4 31.4 30.0 32.2 1.6 1.8 0.6 0.6 1.9 1.1 1.5 1.2 2.7 1.5 3.9 4.6 5.7 7.0 5.3 7.5 8.5 11.5 7.9 7.3 4.0 3.6 0.5 2.8 11.9 2.2 2.0 1.6 2.3 3.7

2.6 2.0 2.4 5.6 7.7 7.0 6.0 4.5 7.2 5.5

3.6 6.5 1.1 5.6 2.9 3.7 4.1 4.2 6.1 4.1 17.4 13.0 16.5 12.6 6.6 4.9 7.6 7.4 2.4 8.7

2.9 3.8 8.0 4.2 4.0 5.7 5.7 4.7 5.8 5.0 1.3 0.8 0.6 4.2 6.4 3.2 1.5 1.3 2.1 2.7

0.3 1.8 0.0 0.7 0.6 7.4 1.4 2.0 8.1 2.7

33.4 26.8 13.3 22.7 25.4 31.6 25.3 30.1 25.6 26.6

69

Table 2.47 • Public debtUSD millions

2010 2011 2012 2013 2014 2015 2016

Est.

External debtMultilateral creditorsBilateral creditors

Paris ClubOther countries

Domestic debtCentral Bank(a)

Other banks and financial institutions(b)

Treasury bondsOther(c)

Total public debt

External debt servicePrincipalInterest

Total public debtExternal debtDomestic debt

External debtExternal debt service

Sources: Banco de Moçambique, Mozambique National Planning and Budget Directorate and Banco de Portugal calculations.Notes: (a) Includes Government debt to reinforce the exchange rate balance; (b) Treasury bill flows only occurring in cash operations; (c) Loans related to fuel subsidies, debt of public companies and leasing operations resulting from the construction of public buildings.

3,744 4,214 4,829 5,783 7,043 7,339 8,4462,437 2,505 2,927 3,374 3,282 3,306 3,7151,307 1,709 1,902 2,409 3,761 4,033 4,731

402 667 671 754 905 1,193 1,239905 1,042 1,231 1,655 2,856 2,840 3,491550 826 800 994 1,102 1,400 1,206

88 111 101 100 95 91 475

161 204 169 281 266 475 162

146 273 355 446 568 408 298154 239 176 167 173 426 271

4,294 5,041 5,630 6,776 8,145 8,739 9,652

54 73 95 143 174 230 27430 39 57 85 99 142 15624 34 38 58 75 88 118

(% of GDP)42.4 35.7 38.6 42.0 48.4 73.1 101.8

37.0 29.8 33.1 35.9 41.9 61.4 89.15.4 5.9 5.5 6.2 6.5 11.7 12,7

(% of exports of goods and services)

125.6 109.5 97.4 121.3 151.7 177.5 224.71.8 1.9 1.9 3.0 3.7 5.6 7.3

Mozambique


Table 2.48 • Government operationsMZM billions

2012 2013 2014 2015 2016 2017

Budg. Est. l.e.(a) Budg. 1st half l.e.(a)

1. Total revenue

1.1. Current revenue

Non-tax revenue

Tax revenue

Income taxes

Consumption taxes

Taxes on international tradeOther taxes

1.2. Grants

2. Total expenditure

2.1. Current expenditure(b)

Compensation of employeesGoods and services

Transfers and subsidies

Scheduled debt interest

2.2. Capital expenditure

Domestic financing

External financing

2.3. Net lending

3. Current balance: (1.1-2.1)

4. Overall balance excl. grants: (1-2-1.2)

5. Overall balance: (1-2)

6. Financing

6.1. Domestic (net)

of which: Banking system

6.2. External (net)

Disbursements

Amortisation

Other operations

7. Financing gap

Sources: Banco de Moçambique, Mozambique National Planning and Budget Directorate, International Monetary Fund and Banco de Portugal calculations.Notes:(a) Level of budget execution, %; (b) Includes other current expenditure; (c) Net borrowing (-) / net lending (+).

125.8 156.6 180.4 174.6 183.7 180.4 98.2 200.4 89.9 44.9

98.5 126.3 156.3 155.9 165.5 165.6 100.0 186.3 85.2 45.7

14.0 18.8 21.3 26.2 21.1 27.1 128.5 32.3 13.6 42.3

84.5 107.5 135.1 129.7 144.4 138.5 95.9 154.1 71.5 46.4

36.8 49.4 63.1 57.9 65.0 64.3 98.8 69.4 36.5 52.6

36.9 44.9 56.4 54.4 60.5 56.4 93.1 66.3 25.9 39.0

7.5 9.7 11.4 12.6 13.9 12.3 88.7 15.2 5.6 37.0

3.2 3.5 4.1 4.7 4.9 5.5 111.7 3.1 3.5 113.9

27.3 30.2 24.1 18.7 18.2 14.8 81.6 14.0 4.8 33.9

142.4 178.5 222.0 185.6 243.4 204.8 84.2 272.3 109.0 40.0

83.8 95.7 118.5 117.8 143.4 141.1 98.4 156.4 73.9 47.3

41.6 49.5 59.8 64.3 70.1 77.8 111.1 77.4 40.4 52.3

14.3 18.9 26.0 22.5 24.8 23.0 92.6 27.1 9.7 35.7

18.8 18.8 21.0 22.1 22.3 23.5 105.5 23.4 14.2 60.4

4.1 4.0 5.2 7.6 15.1 16.3 107.8 26.9 9.4 35.0

53.5 72.3 87.0 64.1 91.8 50.3 54.7 103.2 24.5 23.7

24.9 34.0 45.4 42.7 44.7 23.6 52.9 50.8 15.4 30.3

28.5 38.3 41.7 21.4 47.1 26.6 56.5 52.3 9.1 17.4

5.2 10.6 16.5 3.7 8.1 13.5 166.3 12.7 10.6 83.7

14.7 30.7 37.9 38.1 22.1 24.5 – 29.9 11.2 –

-44.0 -52.2 -65.7 -29.8 -77.8 -39.2 – -86.0 -23.9 –

-16.6 -22.0 -41.6 -11.1 -59.6 -24.4 – -71.9 -19.1 –

16.6 22.0 41.6 11.1 59.6 41.3 69.3 71.9 22.7 31.5

2.6 -4.8 -5.7 29.2 21.8 15.7 72.3 21.1 6.4 30.1

5.6 -14.0 5.1 32.2 – 18.2 – – – –

14.0 26.8 47.3 -18.2 37.9 25.6 67.6 50.8 16.3 32.1

15.6 29.3 50.4 31.0 – 36.9 – – – –

-1.6 -2.5 -3.1 -7.0 – -11.4 – – – –

– – – -42.1 – – – – – –

0.0 0.0 0.0 0.0 0.0 16.9 – 0.0 3.6 –

71

Table 2.49 • Monetary surveyMZM billions

2012 2013 2014 2015 2016 2016/2015 2017 2017

Proj. Est. [1] [2] Mar. May

Net foreign assetsCentral Bank

Foreign assets

Foreign liabilities

Commercial banks

Total domestic creditNet claims on general government

Credit granted

Deposits

National currency

Foreign currency

Earmarked funds

Credit to the economy

National currency

Foreign currency

Other items (net)

Total assets

Broad money (M3)Base money

Currency in circulationDemand deposits

Quasi-money

Total liabilities

Sources: Banco de Moçambique, International Monetary Fund and Banco de Portugal calculations.Notes: [1] Percentage change from the previous period; [2] Percentage change relative to the stock of broad money at the end of the previous period (liquidity expansion/contraction factors).


2011 2012 2013 2014 2015 2016 2017

Dec. Dec. Dec. Dec. Dec. Dec. Mar. May

Deposits Up to 180 days

181 to 365 days

1 to 2 years

Credit Up to 180 days

181 to 365 days

1 to 2 years

Reference rates

Standing liquidity provision facility

Treasury bills (91 days)

IMM, interbank transactions

Source: Banco de Moçambique.

94.4 100.0 104.8 115.3 118.1 151.5 31.4 10.9 149.9 135.4

73.1 85.7 91.5 91.8 96.0 116.8 27.3 7.5 114.0 115.7

84.2 97.1 103.6 113.7 124.3 145.2 27.7 9.4 140.3 140.0

-11.1 -11.3 -12.0 -21.9 -28.3 -28.4 29.7 -1.9 -26.3 -24.3

21.3 14.3 13.3 23.6 22.0 34.7 47.5 3.4 35.9 19.7

117.7 137.6 185.7 255.4 253.8 302.8 18.6 14.2 286.6 276.7

-0.1 -14.0 -8.9 23.3 -8.2 41.5 78.2 5.5 35.8 33.5

45.5 57.4 74.0 85.2 – 127.9 50.3 12.8 162.1 174.6

-45.5 -71.4 -82.9 -61.9 – -86.5 39.7 -7.4 -126.4 -141.1

-44.2 -69.5 -80.6 -59.0 – -81.4 38.1 -6.7 -121.1 -136.5

-1.3 -1.9 -2.3 -2.9 – -5.0 72.7 -0.6 -5.3 -4.6

-0.1 -0.1 -0.1 -0.1 – -0.5 409.0 -0.1 -0.5 -6.6

117.8 151.7 194.6 232.1 262.0 261.4 12.6 8.8 250.9 243.2

89.0 117.3 155.1 188.9 209.5 200.9 6.4 3.6 193.6 191.1

28.8 34.4 39.5 43.3 52.5 60.5 39.8 5.2 57.3 52.1

-26.1 -21.2 -26.0 -37.3 -12.0 -87.2 -134.0 -15.0 -74.0 -65.4

186.0 216.4 264.5 333.5 359.9 367.2 10.1 – 362.5 346.8

186.0 216.4 264.5 333.5 359.9 367.2 10.1 10.1 362.5 346.8

41.1 47.5 57.3 73.9 78.7 99.9 35.2 7.8 93.1 93.9

19.7 22.7 27.3 30.0 35.3 36.3 20.8 – 30.8 31.8

109.5 123.3 154.3 188.4 204.9 207.2 10.0 – 200.1 184.5

56.8 70.4 82.9 115.1 119.7 123.7 7.5 – 131.6 130.4

186.0 216.4 264.5 333.5 359.9 367.2 10.1 – 362.5 346.8

12.7 10.2 8.5 8.4 9.1 12.0 16.9 16.4

13.4 11.5 9.1 9.1 9.4 12.7 17.2 17.2

13.2 9.6 6.1 7.7 6.8 8.8 12.1 12.6

24.4 20.6 19.8 20.4 18.0 28.5 28.4 29.3

23.7 21.4 20.3 20.8 19.1 28.0 29.7 28.6

24.9 21.0 21.1 21.0 18.7 27.7 29.0 28.8

15.0 9.5 8.3 7.5 9.8 23.3 23.3 22.3

11.8 2.6 5.2 5.4 7.5 24.1 24.8 25.3

11.7 2.8 3.4 3.1 5.4 23.2 21.8 21.7

Mozambique



2011 2012 2013 2014 2015 2016

Est. Est.

SolvencyCapital adequacy(a) 17.1 17.9 16.9 15.1 17.0 8.8

16.1 16.9 16.0 13.6 15.5 14.2

2.6 3.2 2.9 3.2 4.3 5.5

25.1 28.1 21.9 22.2 22.1 28.7

26.5 19.6 21.0 21.6 20.4 10.1

2.5 1.9 2.0 2.1 2.0 0.7

64.9 58.9 55.6 55.4 52.7 65.5

61.3 66.1 65.3 62.4 62.8 67.0

27.8 33.4 30.7 28.2 32.2 31.4

34.3 27.4 36.9 35.0 20.4 26.1

77.8 70.8 78.3 82.1 76.5 79.0

47.1 49.1 47.6 47.1 46.9 44.1

11.6 11.3 15.0 13.3 11.8 18.9

Tier 1/risk-weighted assets

Asset quality

Non-performing loans(b)/total loans

Loans in foreign currency / total loans

Return


Return on assets (ROA)

Net interest margin/gross income

Operational costs/gross income

Liquidity

Liquid assets(c)/total assets

Other indicators

General government deposits/total deposits

Private sector credit / total deposits

Personnel costs/operating costs

Interest spread, 1-2 years (lending – deposit)

Sources: Banco de Moçambique and Banco de Portugal calculations.Notes: (a) Regulatory capital/risk-weighted assets; (b) Up to 2013, the calculation of non-performing loans used a definition which did not include all impaired loans; (c) Net assets include deposits with the parent institutions.

73


EUR/MZM USD/MZM ZAR/MZM

EERI(a)

Index: 100 = 2001Official Open Op/Of Official Parallel Open Pa/Of Op/Of

(Of) (Op) (%) (Of) (Pa) (Op) (%) (%) Open Nom. Real

2002 21,896.4 22,370.7 2.2 23,180.4 24,281.3 23,665.4 4.7 2.1 2,373.7 95.7 106.2 26,360.4 26,874.1 1.9 23,340.9 24,248.7 23,782.3 3.9 1.9 3,187.7 77.9 92.7

27,457.0 27,782.7 1.2 22,130.9 23,165.5 22,581.3 4.7 2.0 3,523.4 73.9 96.2

28,337.5 28,576.1 0.8 22,936.3 23,614.4 23,068.4 3.0 0.6 3,617.1 71.6 96.9

32.2 31.4 -2.5 25.0 26.9 26.0 7.8 4.2 3.8 65.8 97.9

35.6 35.0 -1.5 25.6 26.6 25.8 4.2 1.1 3.7 63.7 98.5

35.7 35.5 -0.6 24.2 25.2 24.3 4.0 0.5 3.0 71.1 116.7

38.9 37.2 -4.4 26.7 29.2 27.5 9.5 3.0 3.3 64.2 104.9

45.4 43.6 -4.0 33.0 35.7 34.0 8.1 3.0 4.7 49.5 87.7

40.5 40.5 0.0 29.1 31.0 29.1 6.8 0.0 4.0 56.6 105.8

36.1 36.5 1.2 28.1 29.5 28.4 4.8 1.1 3.5 64.2 117.1

39.7 40.0 0.7 29.9 31.5 30.1 5.3 0.7 3.1 65.1 118.0

40.8 41.6 2.2 30.7 32.9 31.4 7.2 2.2 2.9 67.1 119.5

42.4 44.3 4.4 38.3 42.1 40.0 10.1 4.4 3.1 61.4 108.6

69.2 69.7 0.8 62.6 67.3 63.1 7.6 0.8 4.3 41.1 82.6

2003

2004

2005

2006(b)

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2015 January 36.9 38.7 5.0 31.8 35.9 33.4 13.0 5.1 2.9 68.8 123.3

37.0 38.5 4.1 32.6 36.5 34.0 11.9 4.1 2.9 67.9 122.5

36.3 38.2 5.1 33.5 37.0 35.2 10.3 5.1 2.9 68.0 121.7

36.5 38.9 6.6 33.8 37.6 36.0 11.1 6.6 3.0 66.8 118.0

37.9 40.9 7.9 34.0 37.9 36.7 11.5 7.9 3.1 65.4 114.3

41.6 43.1 3.5 37.1 39.6 38.5 6.7 3.6 3.1 62.0 107.6

42.1 42.7 1.4 38.3 40.2 38.9 4.9 1.5 3.1 61.4 105.7

44.0 45.0 2.4 39.5 42.6 40.4 7.9 2.4 3.1 60.4 104.0

45.1 48.3 7.2 40.2 45.8 43.2 13.9 7.6 3.2 59.6 102.8

46.3 49.2 6.3 41.2 46.2 43.8 12.1 6.3 3.2 57.9 101.5

51.4 53.0 3.3 47.9 54.2 49.4 13.2 3.3 3.5 52.5 93.9

53.8 54.6 1.6 49.5 52.2 50.2 5.6 1.6 3.4 52.7 99.4

February

March

April

May

June

July

August

September

October

November

December

2016 January

February

March

April

May

June

July

August

September

October

November

December

2017 January

February

March

April

MayJune

Sources: Banco de Moçambique, Moçambique National Institute of Statistics, Statistics South Africa, European Central Bank, Organisation for Economic Co-operation and Development and Banco de Portugal calculations.Notes: (a) Effective exchange rate index (EERI) calculated on the basis of official exchange rates applied to the currencies of Mozambique's four main trading partners. (b) A monetary reform was carried out in July 2006, with a conversion rate of 1 to 1,000.

49.3 50.3 2.2 45.3 50.6 46.3 11.7 2.2 2.8 60.0 115.6

52.9 54.4 2.7 47.7 53.5 49.0 12.2 2.7 3.1 55.6 107.0

54.7 56.0 2.3 49.3 57.7 50.4 17.0 2.4 3.3 53.1 101.9

59.3 59.8 1.0 52.3 59.9 52.8 14.6 1.0 3.6 48.7 94.3

62.6 62.7 0.2 55.4 62.9 55.5 13.6 0.2 3.6 47.6 92.1

68.4 68.6 0.3 60.9 66.0 61.1 8.4 0.3 4.1 42.9 83.5

73.0 73.4 0.5 66.0 71.1 66.3 7.7 0.5 4.6 38.9 76.1

80.0 80.4 0.6 71.4 79.0 71.8 10.6 0.6 5.2 35.0 69.7

85.7 86.1 0.5 76.5 78.1 76.9 2.1 0.5 5.5 33.0 67.9

85.5 85.9 0.6 77.6 79.4 78.0 2.3 0.6 5.6 32.6 68.5

81.9 82.0 0.1 75.9 76.2 76.0 0.4 0.1 5.5 33.7 72.1

76.6 76.6 -0.0 72.7 73.9 72.7 1.7 -0.0 5.2 35.4 77.5

75.1 75.2 0.0 70.8 73.6 70.8 4.0 0.0 5.2 35.9 80.0

74.9 74.8 -0.2 70.4 73.5 70.3 4.4 -0.2 5.3 35.5 79.6

73.6 73.5 -0.1 68.9 69.3 68.7 0.6 -0.2 5.3 35.9 80.7

70.7 70.7 -0.0 65.9 66.5 65.9 0.9 -0.0 4.9 38.1 86.4

68.2 68.1 -0.1 61.7 62.7 61.6 1.6 -0.1 4.7 40.1 90.5 67.9 67.8 -0.05 60.4 63.5 60.4 5.06 -0.0 4.6 – –

Mozambique

2.5. São Tomé and PríncipeArea: 997 Km2

Capital city: São Tomé

População: 199.9 thousand (2016; source: World Bank)

Currency: Dobra (STD)

While positive and broadly in line with the average for the African continent, economic growth in São Tomé and Príncipe over the last two years has fallen short of expectations and did not manage to take advantage of the greater political stability in place since 2015. The financial constraints continue to form a significant obstacle to the country's development, namely due to the limitations placed on investment (both private and public). The increased growth in tourism was a positive development, while the banking sector faced structural problems arising from the small size of the Santomean economy.


Santomean economic growth accelerated slightly in 2016 versus the year before. The recent revision of the GDP estimates for the last few years revealed that the slowdown in 2015 was even sharper than initially estimated (3.8 per cent instead of 4.0 per cent); in 2016 the estimated growth rate came to 4.1 per cent, which was not enough to reduce the prevailing level of poverty significantly. Cocoa exports recovered from the fall of 2015, as did tourism which established itself as the main source of external revenue.

In 2016 prices abandoned the disinflation in place since 2008. This behaviour may be linked to the adoption (at the start of 2016) of a new market basket for the price index, providing a more faithful representation of consumption patterns and reflecting more precisely the fluctuations caused by the strong price variations among locally produced food goods, following climatic conditions, as is typical of the second quarter of each year. At the end of 2016, annual inflation (like-for-like) stood at 5.1 per cent, above the forecast of 4.0 per cent.

The weak economic activity (in tandem with the falling price of imported oil products) gave rise to a further reduction in the value of imports, due to which the current account deficit fell for the second year in succession (from 17.0 per cent to 9.4 per cent of GDP). These positive developments benefited also from an improvement in the terms of trade (higher international cocoa prices, reduced price of oil products), a situation which will not be repeated in 2017. The financial balance in 2016 was similar to the year before, despite the fall in public disbursements relating to external financing flows, which was offset by an improved performance from private flows.

Net international reserves fell from their high level of the end of 2015, with imports slated for 2017 still covered however by the foreign exchange reserves, which remained above the three-month threshold, the benchmark specified in the Economic Cooperation Agreement signed with Portugal in 2009. Despite certain fluctuations during the first half of 2017, the foreign exchange reserves presented a similar value at the end of June to that of the start

of the year, duly monitored by the Santomean authorities.

Taking into account the small scale of the private sector and the conditions arising from the foreign exchange regime in force since 2010 (the euro peg), the public finances are the key determinant of the economy's behaviour. The Santomean authorities have aimed to remain suitably prudent in terms of fiscal management, but given the inflexibility of most of the current expenditure (specifically public sector salaries) and the lack of scope to increase the tax base, public expenditure has been discretionary in nature, involving internally financed public investment, as a result of the reductions needed to maintain the main macroeconomic balances, whether internal or external.

2016 was not particularly favourable for the public finances, since, despite the goals expressed in the budget, the domestic primary deficit (the main benchmark for budgetary policy), deteriorated from 3.0 per cent to 3.1 per cent, while the goal set in the adjustment programme agreed with the IMF was 2.0 per cent. At the same time it was impossible to continue the process of settling overdue debts, the positive initiative launched in 2015.

As has been the case in previous years, the current public revenue was below budget (execution level of 82.8 per cent), which reflects a tendency to overestimate the tax authorities' operational capability. In addition to this, the value of oil products' imports fell in value, which traditionally constitute an important source of customs revenue; these revenues fell by around 18 per cent from the year before, due to which the direct tax collection effort (which increased almost 10 per cent from 2015) was not enough to offset that fall.

2016 was particularly modest in terms of external financing of public expenditure. The disbursements relating to loans from international institutions and other development partners to cover public investment projects fell from EUR 30.3 million to EUR 5.8 million. This sharp fall in external financing was offset partially by the increase in grants to projects and in direct support of the budget, which did not prevent a sharp fall in

77

execution of public investment projects, with natural consequences for the creation of conditions for improving economic and job market behaviour.

The recent diplomatic recognition of the People's Republic of China (to the detriment of Taiwan) paves the way for certain investment projects (the renovation of the airport and expansion of the port of S. Tomé) through partnerships with Chinese companies, without direct recourse to public financing. Under the agreement with the IMF, the Santomean government has undertaken to accept only concessional loans, taking into account the high level of external public debt. The local authorities are confident that the opportunities arising from the new relationship with China may be the way to launch investment projects that have been put off for decades due to financing restrictions.

Most of the loans planned for 2016 did not materialise, giving rise to a slight easing of the external public debt to GDP ratio, which fell to around 82 per cent in 2016 from close to 90 per cent in 2015.

The monetary aggregates of the Santomean economy have behaved strangely over the last two years, with broad money and net foreign assets shrinking and credit flat. This behaviour was driven largely by difficulties in the banking sector, which led to the winding up of one of the banks in August 2016, after a prolonged intervention from the central bank. The central bank has sought to act assertively in relation to the high proportion of non-performing loans, requiring that losses be recognised, adequate provisions established and own funds strengthened. The aforementioned bank was closed in an orderly fashion, without losses for most depositors and without negatively impacting public trust in the other institutions.

Pegging the exchange rate to the euro in 2010 has suited the characteristics of the Santomean economy. The fluctuations presented by the effective exchange rate index over the last two years resulted essentially from disruptions in the Angolan currency, which is among those used to set this index.


2012 2013 2014 2015 2016 2017

Est. Est. Est. Est. Proj. Est. Proj.

Real GDP (annual % change) 4.5 4.0 6.5 3.8 5.0 4.1 5.0

10.4 7.1 6.4 4.0 4.0 5.1 3.0

20.8 15.7 16.8 13.2 11.1 -4.8 24.5

-20.9 -23.4 -21.4 -17.0 -12.1 -9.4 -11.3

-10.7 -2.0 -4.1 -7.5 -11.9 -4.6 -4.6

-3.2 -2.6 -2.7 -3.0 -2.0 -3.1 -1.8

83.3 75.4 70.0 89.1 – 81.7 –



Current and capital account (% of GDP)

Overall fiscal balance (% of GDP)

Domestic primary balance (% of GDP)


Sources (for the subsequent charts also): Banco Central de São Tomé e Príncipe, Ministry of Finance (São Tomé and Príncipe) and IMF.

São Tomé and Príncipe


Chart 2.50 • Real GDPAnnual % change

Chart 2.51 • InflationAnnual % change in the CPI

4.54.9

4.54.0

6.5

3.8

5.0

4.1

5.0

0

2

4

6

8

2010 2011 2012 2013 2014 2015 2016(proj.)

2016(est.)

2017(proj.)

0

5

10

15

20

2010 2011 2012 2013 2014 2015 2016 2017


Economic growth in São Tomé and Príncipe again fell short of expectations, despite the good behaviour of exports and tourism. Public investment projects did not materialise, constituting the main factor of this unfavourable performance.

In 2016, the disinflation of the previous years did not continue. The price instability of certain locally produced food goods with a large weight in the market basket of consumer goods gave rise to some volatility spikes.



0

5

10

15

20

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016

Netherlands Portugal BelgiumFrance Other Total

40

80

120

160

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016

Angola Belgium PortugalGabon Other Total

Exports (in particular cocoa) did not recover from 2015. France became the main destination market, replacing Belgium, whose share fell strongly; exports to Portugal also fell.

In 2016, the imports maintained the same level as the year before. The fall in value of oil imports was offset by increases in food goods and equipment. Portugal continues to be the main supplier.

Chart 2.54 • Balance of payments USD millions

Chart 2.55 • Public revenueSTD millions

-250-200-150-100-500

50100150

2012 2013 2014 2015 2016(fore.)

2016(est.)

2017(proj.)

Exports (goods e serv.) Imports (goods e serv.)Project grants Current account

0

1,000

2,000

3,000

2010 2011 2012 2013 2014 2015 2016(budg.)

2016(est.)

2017(budg.)

Tax revenue Other revenue Oil bonuses Grants

The positive developments in the current balance were essentially the result of the increase in exports of services (tourism). Imports maintained their level of the previous year while transfers (both official and private) fell slightly.

Customs revenue fell sharply, more than offsetting the increase in the direct tax collection. Grants (for projects and in support of the budget) increased, but public revenue overall was below expectations.

79

Chart 2.56 • Public expenditureChart 2.57 •STD billions

Chart 2.58 • Budget balance STD billions

0

700

1,400

2,100

2,800

3,500

2010 2011 2012 2013 2014 2015 2016(budg.)

2016(est.)

2017(budg.)

Investment Wages Transfers and subsidies Other current expenditure

-15

-10

-5

0

2011 2012 2013 2014 2015 2016(budg.)

2016(est.)

2017(budg.)

Overall balance (commitment basis) Domestic primary balance

The structure and amounts of the different expenditure items remained essentially unchanged from the year before. Investment expenditure is still far below the levels registered in 2011 and 2012, despite the intentions expressed in the budget.

The domestic primary deficit (the main benchmark for budgetary policy) slipped in 2016 (3.1%) versus the forecast target (2.0%), essentially due to the poor performance of customs revenues and the inability to find offsetting reductions in expenditure.

Chart 2.59 • External debtSTD millions and % of GDP

Chart 2.60 • Liq. expansion/contraction factors Changes in % of initial stock of broad money

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014(est.)

2015(est.)

2016(est.)

Commercial debt Multilateral debtBilateral debt Total (as % of GDP)Arrears (as % of GDP)

-50

-25

0

25

50

75

2010 2011 2012 2013 2014 2015 2016 2017(June)

2017(proj.)

Net foreign assets Credit to the economyNet credit to central gov. Other net dom. assetsBroad money

The value of external debt fell slightly, reaching around 82% of GDP. Concessional loans did not materialise as forecast, preventing the debt ratio from increasing. The share of external debt in arrears has fallen.

The behaviour of the monetary aggregates in 2016 was restricted by the banking sector's operating conditions. The pronounced fall in net foreign assets was a reversal in the behaviour of previous years, while credit essentially stagnated.

Chart 2.61 • Financial stability indicatorsBanking system ratios

Chart 2.62 • Effective exchange rateIndex: 100 = Jan. 1999, monthly averages

-30 -20 -10 0 10 20 30 40 50 60

Capital adequacy

Return on equity

Non-performing loans

Foreign-currency denom.credit

Asset liquidity

2014 2015 2016

100

120

140

160

180

200

2009 2010 2011 2012 2013 2014 2015 2016 2017


(appreciation: + ; depreciation - )

May

The aggregate stability indicators for the banking sector improved in 2016 due to the closure of the institution with the severest problems. However, difficulties continue over the non-performing loans situation and the near-zero profitability of most institutions.

Nominal exchange rate stability has existed since 2010. The swings observed in the EERI since mid-2015 are mainly due to a strong de-valuation in the kwanza and – in the case of the real index – strong inflation in Angola.




2012 2013 2014 20152016 2017

Proj Est. Proj. Est.

Output and pricesNominal GDP STD billions

EUR millions

USD millionsReal GDP Annual % changeInflation y-o-y % change

Average % change


Current revenue % of GDP

Grants % of GDP


of which: Current expenditure % of GDP

Capital expenditure % of GDP

Domestic primary balance(a) % of GDP

Overall balance (commitment basis)

% of GDP

Overall balance (cash basis) % of GDP

Money and creditNet credit to central government Annual % change


Broad money Annual % change

BCSTP reference interest rate Annual rate

Balance of paymentsExports f.o.b. Annual % change

Imports f.o.b. Annual % change

Trade balance % of GDP

Services balance % of GDP


BCSTP net foreign assets EUR millions

USD millions

External public debtTotal external public debt USD millions

% of GDP

Exchange ratesExch. rate EUR / STD Average annual

rateExch. rate USD / STD Average annual

rateNominal(b) EERI (appreciation: +) Annual % change

Real(b) EERI (appreciation: +) Annual % change

Sources: Banco Central de São Tomé e Príncipe, Ministry of Finance (São Tomé and Príncipe), IMF and Banco de Portugal calculations.Notes: (a) Domestic primary balance corresponds to overall balance (commitment basis), excluding grants, oil revenue (signature bonuses and other), debt interest and capital expenditure financed by external sources. (b) Effective exchange rate index (EERI), calculated on the basis of exchange rates applied to the currencies of the main trading partners.

5,064 5,639 6,443 6,978 7,741 7,592 8,248 –

206.7 230.2 263.0 284.8 316.0 309.9 336.7 –

263.6 302.9 346.5 313.7 351.5 340.4 374.7 –

4.5 4.0 6.5 3.8 5.0 4.1 5.0 –

10.4 7.1 6.4 4.0 4.0 5.1 3.0 5.8 June

10.6 8.1 7.0 5.2 4.6 5.6 4.0 5.2 June

33.3 31.0 26.4 28.2 33.9 28.6 32.5 –

15.2 17.0 14.8 15.9 16.5 13.9 16.4 –

17.3 12.5 10.2 11.5 17.4 13.7 16.1 –

44.0 33.1 30.4 35.7 45.8 33.1 37.1 –

17.3 18.7 16.9 19.4 18.1 17.8 17.6 –

26.4 14.0 13.4 15.6 26.8 15.0 18.9 –

-3.2 -2.6 -2.7 -3.0 -2.0 -3.1 -1.8 –

-10.7 -2.0 -4.1 -7.5 -11.9 -4.6 -4.6 –

-9.0 -1.6 -4.2 -7.1 -11.9 -2.4 -4.6 –

459.1 103.3 0.8 28.2 -111.8 22.6 -10.4 31.1 June

10.5 -1.7 -1.1 3.8 7.1 6.3 5.6 1.2 June

20.8 15.7 16.8 13.2 11.1 -4.8 24.5 -6.1 June

14.0 14.0 12.0 10.0 – 10.0 – 9.0 June

37.3 -14.6 33.3 -28.5 30.1 10.6 18.4 –

2.9 15.1 12.4 -16.5 7.0 -1.4 8.5 –

-36.6 -38.2 -36.8 -34.6 -32.2 -31.0 -30.2 –

-2.5 -9.0 -3.9 -0.2 -3.1 5.4 1.3 –

-20.9 -23.4 -21.4 -17.0 -12.1 -9.4 -11.3 –

43.3 52.7 60.2 77.7 89.0 72.4 79.1 72.7 June

55.3 69.4 79.3 85.6 99.0 79.6 88.0 81.0 June

219.5 228.4 242.5 279.4 – 278.1 – 284.8 Mar.

83.3 75.4 70.0 89.1 – 81.7 – 83.7 Mar.

24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 June

19,211 18,618 18,594 22,178 22,023 22,282 22,012 21,999 June

-1.4 0.9 0.5 0.4 – 6.9 – 0.3 June

4.5 6.8 6.0 3.0 – 5.5 – -3.2 May

81

Table 2.55 • Gross domestic productCurrent prices, STD billions

2011 2012 2013 2014 2015 2016 Est. Prov. Prov.

Primary sectorAgriculture, livestock, hunting and forestry

Fishing


Secondary sector

Manufacturing

Electricity, gas and water

Construction

Tertiary sector

Trade

Accommodation and food

Transportation, storage and communication

Financial activities

Real estate activ., rental and serv. to enterprises

Public admin., defence and social security

Education

Health and social work

Other activities

FISIM (Financial intermed. servs. indirectly measured)Indirect taxes

Gross domestic product m.p.



Memo items:

GDPmp (real % change)

GDPmp (nominal % change)

Nominal GDP (EUR millions; current prices)

Nominal GDP (USD millions; current prices)

Sources: Banco Central de São Tomé e Príncipe, Ministry of Finance (São Tomé and Príncipe), and IMF.

513 570 689 751 853 869

260 287 338 345 361 299

237 267 334 388 472 549

15 16 17 18 19 21

718 748 863 1,070 973 1,212

367 355 406 417 435 533

127 120 132 128 135 142

224 273 324 525 402 537

2,997 3,372 3,901 4,476 4,987 5,317

1,257 1,340 1,532 1,687 1,778 1,870

157 144 170 233 361 415

623 612 635 719 852 847

111 121 134 148 160 173

261 268 304 370 405 459

206 407 505 569 631 676

125 205 295 378 391 427

53 51 69 80 82 92

203 223 256 291 326 357

-130 -145 -168 -197 -208 -230

278 271 304 342 374 423

4,229 5,064 5,639 6,443 6,978 7,592

512 634 912 1,646 2,004 2,255

2,563 2,761 3,256 4,267 4,137 4,195

4.9 3.1 4.8 6.5 3.8 4.1

17.7 19.7 11.4 14.3 8.3 8.8

172.6 206.7 230.2 263.0 284.8 309.9

246.5 263.6 302.9 346.5 313.7 340.4





[1] [2] [3] [4]

2005 December2006 December

2007 December

2008 December

2009 December

2010 December

2011 December

2012 December

2013 December

2014 December

2015 December

2016 December

2015 JanuaryFebruary

March

April

May

June

July

August

September

October

November

December

December (proj.)

2016 January

February

March

April

May

June

July

August

September

October

November

December

December (proj.)

2017 January

February

March

April

May

June

December (proj.)

Sources: Banco Central de São Tomé e Príncipe, Ministry of Finance, IMF and Banco de Portugal calculations.Notes: [1] month (n) / month (n-1); [2] month (n) / Dec. (n-1); [3] month (n) / month (n) of the previous year; [4] last 12 months / previous 12 months.

– 17.2 17.2 17.2– 24.6 24.6 23.1

– 27.6 27.6 18.5

– 24.8 24.8 32.0

– 16.1 16.1 17.0

– 12.9 12.9 13.3

– 11.9 11.9 14.3

– 10.4 10.4 10.6

– 7.1 7.1 8.1– 6.4 6.4 7.0

– 4.0 4.0 5.2

– 5.1 5.1 5.6

0.3 0.3 6.4 6.9

0.3 0.6 6.3 6.9

0.5 1.1 6.5 6.8

0.4 1.5 6.1 6.8

0.2 1.7 5.5 6.6

0.2 1.9 5.0 6.5

0.3 2.2 5.1 6.3

0.1 2.3 5.0 6.1

0.1 2.4 4.8 5.9

0.3 2.7 4.3 5.6

0.5 3.2 4.4 5.5

0.8 4.0 4.0 5.2

– – 5.2 5.8

0.8 0.8 4.5 4.9

0.2 0.9 4.4 4.8

0.8 1.7 4.7 4.6

1.6 3.4 8.1 5.0

0.5 3.9 6.2 5.0

-0.4 3.4 5.6 5.1

0.2 3.7 5.5 5.1

0.1 3.8 5.5 5.2

0.3 4.1 5.8 5.2

0.4 4.5 5.8 5.4

0.8 5.4 6.2 5.5

-0.2 5.1 5.1 5.6

– – 4.0 4.6

0.4 0.4 4.7 5.6

0.3 0.7 4.9 5.7

0.8 1.5 4.9 5.7

1.2 2.7 4.3 5.4

-0.4 2.3 3.5 5.1

1.8 4.1 5.8 5.2

– – 3.0 4.0

83


2012 2013 2014 2015 2016 2017

Est. Est. Proj. Est. Proj.

1. Current account

1.1. Trade balance

Exports (f.o.b.)

of which: Cocoa

Re-exports

Imports (f.o.b.)

of which: Food

Capital goods

Fuel

1.2. Services

Exports

of which: Travel and tourism

Imports

of which: Freights and insurance

1.3. Income

Credit

Debit

of which: Scheduled debt interest

1.4. Current transfers

Private transfers

of which: Emigrants' remittances

Official transfers (net)

of which: Project grants

Other transfers (incl. HICP)

2. Capital and financial account2.1. Capital account

2.2. Financial account

Foreign direct investment

of which: Oil signature bonuses

Portfolio investment (net)

Other investment (net)

Other assets

Public sector (net)

of which: Disbursements

Amortisation

Private sector (net)

Commercial banks

Short-term private capital

3. Errors and omissions

4. Overall balance (1) + (2) + (3)

5. Financing gap: (4) + (5)

Change in foreign reserves(a) (increase: -)

National Oil Account (increase: - )

Use of IMF resources (net)

Memo item:


Sources: Banco Central de São Tomé e Príncipe, International Monetary Fund and Banco de Portugal calculations.Note: (a) Excludes National Oil Account flows.

-55.2 -70.9 -74.2 -53.3 -42.7 -31.9 -42.2

-96.6 -115.7 -127.4 -108.5 -113.3 -105.5 -113.1

15.1 12.9 17.2 12.3 16.0 13.6 16.1

5.3 5.4 9.2 7.8 11.4 10.4 12.0

8.8 5.9 7.0 3.3 3.4 3.2 2.9

-111.7 -128.6 -144.6 -120.8 -129.2 -119.1 -129.2

-33.5 -38.4 -42.5 -34.6 -34.2 -36.1 -34.0

-35.0 -38.5 -30.3 -27.7 -41.3 -31.2 -40.7

-27.2 -38.2 -41.1 -33.2 -23.8 -21.7 -26.1

-6.7 -27.3 -13.6 -0.7 -11.0 18.5 4.7

17.9 36.0 71.3 68.1 71.8 87.5 90.4

12.6 30.6 56.0 51.8 54.7 68.8 77.7

-24.6 -63.3 -84.9 -68.8 -82.8 -69.0 -85.7

-19.3 -18.8 -23.6 -19.6 – -19.9 –

-4.7 2.6 5.7 -0.1 1.0 2.9 -1.2

1.0 5.1 10.1 3.5 – 5.7 –

-5.7 -3.5 -4.4 -3.6 – -2.9 –

-1.9 -2.3 -2.4 -1.9 – -2.8 –

52.8 69.5 61.2 56.0 80.6 52.2 65.0

4.9 24.6 25.2 19.6 20.3 15.9 15.0

6.4 26.1 25.2 19.6 – 17.5 –

47.9 44.9 36.0 36.4 60.3 36.3 50.0

38.7 29.4 27.9 33.6 50.9 29.7 43.2

1.4 1.9 0.8 6.0 6.6 3.4 6.9

64.3 34.3 37.5 35.2 55.9 38.6 45.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0

64.3 34.3 37.5 35.2 55.9 38.6 45.0

21.7 10.2 18.9 19.9 4.2 21.2 17.5

2.0 4.8 0.0 2.4 2.5 2.8 0.0

0.0 0.0 0.0 0.3 0.0 0.2 0.0

42.7 24.1 18.6 15.0 51.7 17.2 27.5

26.9 16.1 15.5 5.7 5.8 7.1 0.0

15.2 3.1 15.6 32.9 26.8 4.2 8.2

22.1 10.8 16.3 34.5 28.1 9.0 11.5

-6.9 -7.7 -0.7 -1.6 -1.3 -4.8 -3.3

0.6 5.0 -12.5 -23.7 19.0 5.9 19.3

-11.0 10.6 -17.5 -9.7 1.5 -9.0 1.8

11.7 -5.6 5.0 -14.0 17.6 14.9 17.4

-10.3 48.1 46.3 36.6 0.0 -14.3 0.0

-1.2 11.6 9.5 18.5 13.2 -7.6 2.8

1.2 -11.6 -9.5 -18.5 -13.2 7.6 -2.8

1.4 -9.1 -10.5 -18.2 -13.0 7.8 -6.1

-0.8 -3.2 2.3 -0.4 -1.2 -1.2 2.2

0.6 0.7 -1.4 0.0 1.0 1.0 1.1

-20.9 -23.4 -21.4 -17.0 -12.1 -9.4 -11.3




2008 2009 2010 2011 2012 2013 2014 2015 2016Est.

France 3.7 5.5 0.3 2.3 8.8 11.6 13.2 5.1 25.8

7.9 18.9 20.2 29.5 13.9 20.7 24.4 24.8 6.3

28.2 26.8 10.9 37.4 38.8 29.1 21.4 36.1 20.7

49.2 32.3 44.4 13.2 7.7 6.2 1.1 5.1 2.8

0.4 0.7 0.3 1.8 1.1 0.9 0.2 0.5 0.1

10.6 15.8 23.9 15.8 29.7 31.5 39.7 28.4 44.3

7.8 9.2 10.9 11.0 15.1 12.9 17.2 11.3 13.6

Belgium

Netherlands

Portugal

Gabon

Other

Total exports(a)

Sources: Banco Central de São Tomé e Príncipe, Ministry of Finance and Banco de Portugal calculations.Note: (a) In USD millions.

Table 2.59 • Goods importsOrigins as a percentage of total imports

2008 2009 2010 2011 2012 2013 2014 2015 2016Est.

Angola 22.9 14.8 12.1 9.6 21.9 24.3 27.2 24.7 17.3

1.7 1.9 1.8 1.7 3.3 1.9 1.7 1.1 1.9

0.9 1.4 2.4 2.0 1.4 1.6 2.8 3.0 5.2

0.2 0.7 5.0 2.4 0.6 0.7 0.6 0.3 1.4

3.0 2.7 5.3 2.0 2.1 1.4 2.0 1.7 1.6

0.8 4.4 1.2 2.5 1.5 1.4 0.4 2.2 2.4

0.1 0.4 0.5 0.3 0.4 0.3 0.9 0.8 0.4

61.3 56.4 60.9 58.9 55.7 59.8 58.5 56.3 57.9

9.1 17.3 10.8 20.6 13.1 8.6 5.9 9.9 11.9

92.2 83.8 96.2 115.7 119.1 128.6 144.6 118.9 119.1

Belgium

China

France

Gabon

Japan

Netherlands

Portugal

Other

Total imports(a)

Sources: Banco Central de São Tomé e Príncipe, Ministry of Finance and Banco de Portugal calculations.Note: (a) In USD millions

85

Table 2.60 • External public debt USD millions

2010 2011 20122013 2014 2015 2016

Est. Est. Est Est

1. Medium and long-term debtof which: Arrears

1.1 Multilateral debt

of which: Arrears

BADEA

AfDB/ADF

EIB

IFAD

IMF

IDA

OPEC

1.2 Bilateral official debt

of which: Arrears

1.2.1 Paris Club members

of which: Arrears

Germany

Belgium

Spain

France

Russia

1.2.2 Other official creditors

of which: Arrears

Angola

Algeria

China

Former Yugoslavia

Portugal

1.3 Commercial debt

of which: Arrears

Italian entities

MSF

Other entities

2. Short-term debtof which: Arrears

Angola

Brazil

Equatorial Guinea

Nigeria

Total external public debt [1 + 2]

of which: Arrears

Memo items:

External debt service (program.) (as % of goods and servces exports)Total external public debt (% of GDP)

Total arrears (% of GDP)

Sources: Banco Central de São Tomé e Príncipe, Ministry of Finance, IMF and Banco de Portugal calculations.

139.7 155.2 179.7 188.6 202.6 239.6 238.8

69.1 67.7 81.6 82.7 85.7 72.4 66.6

38.6 42.1 41.0 43.7 41.5 42.7 40.3

0.0 0.0 0.0 0.0 0.0 0.0 0.0

5.1 5.8 5.9 5.8 7.1 9.4 10.5

3.2 2.2 2.1 5.5 5.3 5.3 4.4

1.4 0.9 0.9 0.6 0.3 0.1 0.0

6.5 7.9 8.0 7.7 6.9 6.7 6.4

5.0 4.9 5.5 6.0 4.6 4.6 4.3

13.4 14.9 14.1 14.0 14.0 13.8 12.3

4.0 5.5 4.5 4.1 3.3 2.8 2.4

75.3 87.3 98.9 107.7 125.1 154.7 152.7

43.3 41.9 41.9 45.5 49.6 49.2 30.8

0.9 0.9 0.9 1.0 1.1 0.0 0.8

0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.9 0.9 0.9 1.0 1.1 0.0 0.8

0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0

74.4 86.4 98.0 106.7 124.0 154.7 151.9

43.3 41.9 41.9 45.5 49.6 49.2 30.8

32.0 32.0 32.0 32.0 49.0 63.0 67.5

3.1 0.0 0.0 0.0 0.0 0.0 0.0

17.0 17.3 17.3 18.6 18.8 28.4 18.4

8.8 8.8 8.8 8.8 8.8 8.8 8.8

13.4 28.2 39.8 47.3 47.3 54.5 57.2

25.8 25.8 39.7 37.2 36.1 42.2 45.8

25.8 25.8 39.7 37.2 36.1 23.2 35.8

25.8 25.8 25.8 24.3 24.3 24.3 24.3

– – 7.4 6.4 5.4 5.0 4.7

– – 6.5 6.5 6.4 12.9 16.8

17.7 27.7 39.8 39.8 39.8 39.3 39.3

13.4 17.7 3.4 3.4 7.7 3.4 7.7

3.4 3.4 3.4 3.4 3.4 3.4 3.4

4.3 4.3 4.3 4.3 4.3 4.3 4.3

0.0 0.0 2.1 2.1 2.1 1.6 1.6

10.0 20.0 30.0 30.0 30.0 30.0 30.0

157.4 182.9 219.5 228.4 242.5 279.4 278.1

82.5 85.4 85.0 86.1 93.4 75.8 74.3

35.2 47.5 52.0 78.9 – – –

81.0 76.8 83.3 75.4 70.0 89.1 81.7

42.5 35.9 32.3 28.4 27.9 24.2 21.8



Table 2.61 • Government operations STD billions

2012 2013 2014 20152016 2017

Budg. Est. l.e.(a) Budg.

1. Total revenue1.1. Current revenue

Tax revenueDirect taxesIndirect taxes

of which: Customs revenueOther tax revenue

Non-tax revenue1.2. Grants

Project grantsOther grants (incl. budget support)Debt relief-related grants

1.3. Oil signature bonuses

2. Total expenditure2.1. Current expenditure

Compensation of employeesGoods and servicesSubsidies and transfersPublic debt interest Other current expenditure

2.2. Capital expenditureWith domestic financingWith external financing

2.3. HICP Initiative-related expenditure

3. Overall balance (commitment basis) [1] - [2]

4. Change in arrears [decrease: -]External arrears (interest)Domestic arrears

5. Items in transit, errors and omissions

6. Overall balance (cash basis) [3] + [4] + [5]

7. Financing7.1. Domestic financing

Net bank credit (excl. NOA(b))Non-bank financing

7.2. External financingDirect disbursements to the GSBudgetDisbursements for projectsScheduled amortisation

7.3. Transfer from/to NOA(b) [Budget inflows: +]

Memo items:Overall balance, commitment basis (% of GDP)Domestic primary balance (c) (STD billions)Domestic primary balance (c) (% of GDP)

Sources: Banco Central de São Tomé e Príncipe, Ministry of Finance, IMF and Banco de Portugal calculations.Notes: (a) Level of budget execution, per cent. (b) National Oil Account (NOA). (c) Domestic primary balance corresponds to overall balance (commitment basis), excluding grants, oil revenue (signature bonuses and other), debt interest and capital expenditure financed by external sources.

1,685 1,750 1,698 1,965 2,625 2,168 82.6 2,678771 956 951 1,107 1,276 1,056 82.8 1,350704 854 881 1,006 1,170 949 81.1 1,237222 282 300 344 406 377 92.9 436388 460 490 550 661 463 70.0 673334 398 407 455 551 371 67.3 545

93 112 92 112 104 108 103.8 12867 102 70 101 106 107 100.9 112

876 704 657 804 1,349 1,038 76.9 1,328706 509 541 610 995 891 89.5 846142 173 103 61 205 81 39.5 329

28 22 13 133 149 65 43.6 15439 90 90 53 0 74 – 0

2,226 1,864 1,961 2,488 3,544 2,516 71.0 3,058

875 1,056 1,086 1,356 1,402 1,356 96.7 1,450419 521 569 623 676 684 101.2 702198 216 158 239 240 249 103.8 251190 256 245 248 311 282 90.7 326

30 28 28 52 56 34 60.7 5239 34 86 194 118 106 89.8 119

1,336 790 865 1,087 2,074 1,140 55.0 1,56274 60 58 51 540 50 9.3 445

1,262 730 807 1,036 1,534 1,090 71.1 1,11714 17 10 45 68 19 27.9 47

-540 -114 -262 -523 -919 -348 37.9 -380

33 -22 -22 95 0 77 – 0

0 0 0 0 0 0 – 033 -22 -22 95 0 77 – 0

51 47 13 -67 0 86 – 0

-456 -89 -271 -495 -919 -185 20.1 -380

456 89 271 495 919 185 20.1 380

-86 50 -56 -71 388 150 38.7 359

-86 -71 -56 -71 0 150 – 00 121 0 0 388 0 0.0 359

558 94 282 575 478 63 13.2 -2975 0 77 20 0 32 – 0

532 159 238 742 659 143 21.7 150-49 -64 -33 -187 -181 -112 61.9 -179

-15 -56 44 -9 53 -28 -52.8 51

-10.7 -2.0 -4.1 -7.5 -11.9 -4.6 – -4.6-163 -149 -175 -209 -155 -233 – -148

-3.2 -2.6 -2.7 -3.0 -2.0 -3.1 – -1.8

87

Table 2.62 • Monetary survey STD billions

2011 2012 2013 2014 2015 2016 Dec. 16/ Dec. 15

2017 Jun 17/ Dec. 16

Dec. Dec. Dec. Dec. Dec. Proj. Dec. [A] [B] Proj. Jun. [A] [B]

1. Net foreign assets 1,263 1,630 1,648 2,230 2,527 2,836 2,105 -16.7 -14.8 2,632 2,010 -4.5 -3.5891 1,062 1,292 1,474 1,903 2,180 1,775 -6.7 -4.5 1,937 1,782 0.4 0.3

372 568 356 756 624 656 330 -47.1 -10.4 696 228 -30.9 -3.8

303 250 501 278 313 320 598 90.9 10.0 732 528 -11.8 -2.61,728 1,811 1,651 1,630 1,630 2,129 1,681 3.2 1.8 1,837 159 -90.6 -56.3

-22 -123 -250 -252 -323 38 -396 22.3 -2.5 -355 -519 31.3 -4.6

267 236 246 258 255 255 424 66.0 5.9 254 366 -13.6 -2.1

-290 -359 -496 -510 -579 -217 -819 41.6 -8.5 -610 -885 8.1 -2.4

1,750 1,934 1,902 1,882 1,953 2,091 2,077 6.3 4.3 2,193 2,102 1.2 0.9

-1,424 -1,561 -1,152 -1,352 -1,317 -1,809 -1,084 -17.7 8.2 -1,106 -1,055 -2.6 1.0

1,566 1,879 2,147 2,508 2,840 3,156 2,703 -4.8 -4.8 3,364 2,538 -6.1 -6.1177 173 187 223 247 259 259 4.7 – 275 226 -12.6 –

955 1,070 1,404 1,585 1,935 2,182 1,878 -2.9 – 2,308 1,709 -9.0 –

493 561 872 884 1,184 1,243 1,264 6.7 – 1,416 1,120 -11.3 –

462 510 532 701 751 939 615 -18.1 – 892 589 -4.2 –

434 636 556 701 658 715 567 -13.9 – 781 603 6.4 –

53 184 303 465 475 486 387 -18.5 – 548 429 10.7 –

381 452 253 236 183 229 179 -2.2 – 233 174 -2.8 –

1.1. Central bank

1.2. Commercial banks

2. Net domestic assets2.1. Net domestic credit

2.1.1. Net credit to centr. gov.

2.1.1.1. Gross loans to centr. govt.2.1.1.2. Deposits of centr. govt.

2.1.2. Credit to the economy

2.2. Other assets and liabilities (net)

3. Broad money3.1. Currency in circulation

3.2. Demand deposits

3.2.1. In national currency

3.2.2. In foreign currency

3.3. Other deposits

3.3.1. In national currency

3.3.2. In foreign currency

Sources: Banco Central de São Tomé e Príncipe, International Monetary Fund and Banco de Portugal calculations.Notes: [A] Percentage changes from the end of the previous year. [B] Percentage changes in relation to the initial stock of broad money (liquidity expansion/contraction factors).


2011 2012 2013 2014 2015 2016 2017

Dec. Dec. Dec. Dec. Dec. Mar. Jun. Sep. Dec. Mar. Jun.

1. BCSTP reference rate

2. Lending rates2.1. Credit (91-180 days)

2.2. Credit (181 days-1 year)

2.3. Credit (over 1 year)

3. Deposit rates3.1. Deposits (up to 90 days)

3.2. a. Deposits (91 days-1 year)

3.2. b. Deposits (91-180 days)

3.2. c. Deposits (181 days-1 year)

3.3. Deposits (over 1 year)

4. Interest rate of Treasury Bills(b)

Memo item:


Source: Banco Central de São Tomé e Príncipe.Notes: Indicative rates (calculated on the basis of raw information provided by banks). (a) The series of deposit rates (term deposits) before and after 2012 are not comparable due to changes in classification. (b) Primary market Treasury Bill interest rate (year or quarter of issuance).

15.0 14.0 14.0 12.0 10.0 10.0 10.0 10.0 10.0 10.0 9.0

26.0 26.0 23.0 23.0 23.5 18.9 18.9 19.3 19.3 20.3 –

26.0 26.0 23.3 22.9 23.2 19.0 18.8 19.2 19.2 20.1 –

26.5 26.5 25.1 24.2 22.8 20.1 19.9 20.4 20.3 21.1 –

12.2 12.2 – – – – – – – – –

13.7 13.7 – – – – – – – – –

– – 10.0 7.6 8.0 3.9 3.8 3.9 3.8 5.8 –

– – 10.1 8.9 6.3 4.2 4.1 4.1 4.2 3.9 –

12.8 12.8 8.0 9.4 6.2 4.0 3.9 3.9 3.9 4.4 –

– – – – 6,2 3,0 – – – 3,0 –

11.9 10.4 7.1 6.4 4.0 4.7 5.6 5.8 5.1 4.9 5.8




2012 2013 2014 2015 2016 2017

Dec. Dec. Dec. Dec. Mar. Jun. Sep. Dec. Mar.

Capital AdequacyTier 1 ratio 20.3 22.7 22.6 24.1 24.0 23.9 25.5 27.8 34.4

88 75 75 86 86 86 100 100 100

0 13 0 0 0 0 0 0 0

13 13 25 14 14 14 0 0 0

22.7 18.4 20.3 15.5 13.9 12.9 20.6 22.5 24.5

57.9 53.9 46.5 42.1 44.2 39.3 30.1 27.5 28.1

15.4 16.9 19.1 29.8 32.7 35.9 28.4 27.1 28.3

39.4 56.3 45.1 68.7 75.5 69.0 59.2 71.0 73.8

-0.8 -2.1 -3.1 -5.1 -1.7 -2.2 0.1 0.0 0.2

-3.2 -9.3 -15.9 -27.0 -9.5 -12.1 0.9 0.1 1.2

117.8 471.0 164.5 215.9 244.2 189.1 100.2 108.6 92.2

37.8 40.8 45.8 52.0 48.5 49.2 53.1 54.0 49.5

61.5 39.6 72.7 72.5 68.4 67.1 79.6 84.6 70.4

64.7 56.3 47.3 47.1 47.7 47.5 43.4 47.0 50.8

30.8 27.0 28.1 30.0 29.5 29.0 24.5 26.6 29.4

101.7 85.8 69.6 63.5 65.1 64.4 61.0 63.5 60.6

Percentage of banks w/ratio >= 10%

Percentage of banks w/ratio > 6% and < 10%

Percentage of banks w/ratio < 6%

Capital (net)/Assets

Asset QualityCredit in foreign currency/total credit

Non-performing loans/total loans

Liabilities/defaults

ReturnReturn on assets (ROA)


Costs/returns

LiquidityLiquid assets/total assets

Liquid assets/short-term liabilities

Credit/total liabilities

Foreign currency-denominated liabilities/total liabilitiesCredit/deposits

Sources: Banco Central de São Tomé e Príncipe.

89


EUR/STD USD/STD EERI(a)(b)

Exchange rate Annual change Exchange rate Annual change Nominal Real

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2015 January

February

March

April

May

June

July

August

September

October

November

December

2016 January

February

March

April

May

June

July

August

September

October

November

December

2017 January

February

March

April

May

June

Sources: Banco Central de São Tomé e Príncipe and Banco de Portugal calculations. Notes: (a) Effective exchange rate index (EERI), calculated on the basis of exchange rates applied to the currencies of São Tomé and Príncipe's main trading partners; (b) An increase / decrease in the EERI (nominal or real) corresponds to an appreciation / depreciation of the STD.

18,558 18.7 13,537 8.8 134.6 103.8

21,602 16.4 14,685 8.5 116.9 113.5 22,510 4.2 16,208 10.4 112.2 124.6

24,500 8.8 18,574 14.6 105.4 127.3

24,500 0.0 17,754 -4.4 107.0 139.8 24,500 0.0 19,211 8.2 105.5 146.1

24,500 0.0 18,618 -3.1 106.5 156.1

24,500 0.0 18,594 -3.1 107.0 165.5

24,500 0.0 22,178 19.3 107.4 170.4

24,500 0.0 22,282 0.5 114.8 179.8

24,500 0.0 21,090 16.4 105.3 168.7

24,500 0.0 21,745 20.3 105.1 168.6

24,500 0.0 22,739 27.4 104.5 165.8

24,500 0.0 22,612 26.5 103.0 163.5

24,500 0.0 21,861 21.8 105.6 166.9

24,500 0.0 21,820 20.1 108.1 170.8

24,500 0.0 22,452 23.9 108.3 171.2

24,500 0.0 22,189 19.8 108.6 172.6

24,500 0.0 21,996 15.3 110.4 174.2

24,500 0.0 21,957 12.8 110.4 174.2

24,500 0.0 22,951 16.0 109.4 173.1

24,500 0.0 22,723 13.6 109.6 174.5

24,500 0.0 22,386 6.1 113.1 181.7

24,500 0.0 22,234 2.2 114.1 182.7

24,500 0.0 22,275 -2.0 114.3 180.5

24,500 0.0 21,780 -3.7 115.7 184.0

24,500 0.0 21,804 -0.3 115.7 183.0

24,500 0.0 21,980 0.7 115.5 180.4

24,500 0.0 22,301 -0.7 115.1 178.7

24,500 0.0 22,019 -0.8 115.4 179.2

24,500 0.0 22,014 0.1 115.4 178.1

24,500 0.0 22,368 1.9 115.0 177.1

24,500 0.0 22,836 -0.5 114.5 177.5

24,500 0.0 23,386 2.9 113.9 175.3

24,500 0.0 23,247 3.8 114.1 176.1

24,500 0.0 23,188 4.3 114.1 175.9

24,500 0.0 23,113 3.8 114.2 174.2 24,500 0.0 23,068 5.9 114.3 175.2

24,500 0.0 22,353 2.5 115.3 175.3

24,500 0.0 21,999 0.1 115.8 –


2.6. Timor-LesteArea: 14,954 Km2

Capital city: Dili

Population: 1.269 million (2016; source: World Bank)

Currency: US dollar (USD)

The latest estimates indicate that growth in the Timorese economy (non-oil sector) in 2016 is expected to have exceeded 5 per cent, the highest level for the past five years. In turn, revenue from the exploitation of energy resources (oil and gas) dropped even more markedly than in the previous year, which led to a current account deficit for the first time in Timor-Leste. After the negative trend observed since 2015, consumer prices stabilised at the start of 2017. The end of the appreciation of the US dollar (Timor-Leste’s official currency) against the currencies of its main trading partners is expected to have contributed to this. The value of the Petroleum Fund declined (slightly) further in 2016, as a combined result of lower oil revenue and the need to cover public expenditure.


The latest estimates on the behaviour of the Timorese economy (excluding the energy sector) indicate a stronger momentum than in previous years (a real rate of change of 5.4 per cent). Growth was still considerably lower than the high rates recorded in 2010 and 2011. However, these rates were unsustainable, as they were based on costly public investment projects and a considerable increase in social benefits. In turn, the current behaviour is due to a gradual intensification of favourable conditions for economic activity, namely in the private sector. Buoyant economic activity is crucial, given that income from the exploitation of energy resources has been declining rapidly, and it still remains unclear when the exploitation of already identified oil fields is to begin. In 2016 non-oil GDP exceeded oil and gas production (as had already been the case for the first time in 2015).

Since the last quarter of 2015, consumer prices have followed a deflationary trend, chiefly due to the behaviour of import prices, given that the currencies of the main countries of origin of Timorese imports (most notably, the Indonesian rupiah) had been depreciating against the US dollar, which is Timor-Leste’s official currency. This trend was countered by a recent (moderate) fall in the US dollar, while the price level stabilised overall since the beginning of 2017.

Since its independence (in 2002), Timor-Leste has always posted external current account surpluses, initially owing to transfers from its development partners and, from 2006 onwards, due to massive inflows of oil revenue. Timor-Leste posted a current deficit for the first time in 2016, given that this revenue declined again substantially, while income from the Petroleum Fund’s financial investments did not offset the decline in revenue. Indeed, the current environment in international financial markets is not conducive to high financial gains, although the Fund’s financial assets are increasingly sophisticated and diversified.

Foreign assets in the Petroleum Fund (approximately 9 times the size of GDP) and in foreign exchange reserves still allow the country to remain in a comfortable position in terms of its external payments, but it is crucial

that it ensures the economy is able to compete abroad, despite the difficulties arising from the small size of its economy and the lack of infrastructure (which nevertheless improved considerably in the past few years).

Timorese exports continue to be mostly composed of coffee. Although of excellent quality, Timorese coffee needs its production to be thoroughly and urgently modernised. In 2016 Canada became for the first time an important destination market for Timorese coffee, together with the United States and Germany. Goods exports grew slightly in 2016, but continue to account for only 3 per cent of imports.

Indonesia and China are the main suppliers of import goods, with the latter exceeding in 2016 other, more traditional, partners, such as Singapore, Malaysia and Vietnam. The strengthening of China as a trading partner is related to the increasing presence of Chinese economic interests in Timor-Leste, most notably in trade, restaurants and hotels. The value of imports in 2016 fell by around 15 per cent from the previous year, enhancing the decline of the previous year, due to the termination of the process of acquiring costly capital goods for the power stations that were built from 2011 to 2014.

The fall in oil revenue intensified the public account imbalance, increasingly financed by the Petroleum Fund, despite the marked growth of domestic tax revenue in 2016, as a result of a more efficient tax administration and greater momentum in local economic activity.

The preparation (and implementation) of the budget for 2017 was somewhat influenced by the fact that elections were held this year for the President of the Republic and the Parliament, with the new government expected to submit an amended budget at the start of its term of office. In any case, the infrastructure investment policy is expected to continue, more specifically investment in transport infrastructure (roads and ports), measures which are considered essential to creating the conditions for the economy’s private sector growth.

In 2016 public expenditure increased from the previous year, owing, to a large extent, to

93

the implementation of the investment projects envisaged for the Oecusse special economic zone and the road network. The execution rate in the investment component was above 100 per cent (which is uncommon), while execution in current expenditure was close to 97 per cent.

Around 80 per cent of public expenditure is financed by Petroleum Fund transfers, illustrating the dependence of public accounts on these financial reserves. The value of this Fund increased continuously up to 2014, but since then its revenue (taxes and royalties paid by oil companies and income from financial investments) have been below the amounts transferred to the Treasury (particularly in 2016). In the first half of 2017, the value of the Fund recovered somewhat (again exceeding USD 16.5 billion), owing to positive developments in income from a number of financial asset classes and a decreased need for public funding.

The value of the banking sector’s net foreign assets increased slightly in 2016 (albeit with a few intra-annual fluctuations), while credit remained practically stagnated, resulting in an increase in money supply of around 14 per cent. In the first half of 2017, a decline in foreign assets led to a contraction in broad money (around 8 per cent), despite slightly more dynamic credit (9 per cent increase).

Although small, the banking sector of Timor-Leste has continued to make substantial progress in terms of consolidating its infrastructure, most notably as regards modernising its payment system by adopting real-time electronic payment and transfer practices which are uncommon in economies at this stage of development. The recent launch of a credit guarantee initiative aims to ease constraints on the development of the banking sector’s role in supporting the economy.

The US dollar was adopted as Timor-Leste’s official currency in 2000 and continues to be its currency, as it is recognised that it has served the country’s economic interests adequately. The fact that Timor-Leste is not able to conduct monetary and exchange policy autonomously is not particularly relevant, given the structural characteristics of the economy (and the fact that the overwhelming majority of Timor-Leste’s external revenue is denominated in USD).

The country has also issued its own coins since 2003, with denominations indexed to the US dollar, an initiative which is to be strengthened soon with the introduction of the 200 centavo coin (corresponding to 2 US dollars).


2011 2012 2013 2014 2015 2016 2017

Est. Est. Proj.

Total GDP (real annual % change)

Non-oil GDP (real annual % change)


Broad money (rate of change)

Current account (% of non-oil GDP)

Fiscal balance (% of non-oil GDP)

Oil revenue (% of non-oil GDP)

Petroleum Fund (% of non-oil GDP)

Sources (for the subsequent charts also): Banco Central de Timor-Leste, Ministry of Finance of Timor-Leste and International Monetary Fund.Notes: (a) The inflation figure for 2017 corresponds to the year-on-year change recorded at the end of July. (b) The figure for 2017 corresponds to the figure observed in June.

11.9 4.8 -10.9 -26.0 20.9 – –

7.9 5.0 2.7 4.3 4.0 5.4 4.0

17.4 9.1 4.0 0.3 -0.7 0.1 1.0(a)

10.5 24.8 22.9 20.0 7.0 14.3 -8.4(b)

222 219 171 75 15 -31 –

233 233 168 63 7 -46 -14

326 318 234 145 80 32 52

877 944 1,066 1,130 1,010 935 927(b)

Timor-Leste


Chart 2.63 • Non-oil GDP Real annual % change

Chart 2.64 • Oil GDP USD millions

10.1

7.9

5.0

2.7

4.3 4.0

5.4

4.0

0

4

8

12

2010 2011 2012 2013 2014 2015 2016(est.)

2017(proj.)

3,104

4,6245,477

4,234

2,591

1,4961,172

0

2,000

4,000

6,000

2010 2011 2012 2013 2014 2015 2016(est.)

The pace of economic growth in Timor-Leste (non-oil sector) picked up in 2016 from the previous years. The launch of a number of public and private investment projects (infrastructure and new industrial units respectively) is expected to have contributed to this new dynamic.

As expected, the fall in the value of oil production continued, owing to the gradual depletion of the Bayu-Undan oil field. The governments of Timor-Leste and Australia are negotiating the exploitation of new offshore oil fields.


Chart 2.66 • External accounts USD millions

-5

0

5

10

15

20

2010 2011 2012 2013 2014 2015 2016 2017


-1,000

0

1,000

2,000

3,000

4,000

2010 2011 2012 2013 2014(est.)

2015(est.)

2016(est.)

Exports (goods and serv.) Imports (goods and serv.)Oil revenue Current account balance

The recent depreciation of the US dollar against the currencies of Timor-Leste’s main trading partners (specifically, the Indonesian rupiah) is expected to have contributed to the reversal of the deflationary trend observed since the last quarter of 2015.

The fall in oil revenue (both tax revenue and income from Petroleum Fund investments) and the maintenance of a high imbalance in the goods and services account were behind an unprecedented current account deficit.



0

5

10

15

20

25

30

35

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016

Other Indonesia SingaporeGermany USA Total

0

200

400

600

800

1,000

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016

Other Australia ChinaSingapore Indonesia Total

Timor-Leste’s exports (mostly coffee) grew slightly from the previous year, but were nevertheless below the figures observed from 2010 to 2012. Canada became an important market for Timorese coffee for the first time.

The level of imports declined again in 2016, after increasing considerably from 2011 to 2014, owing to purchases of capital goods. Indonesia has consolidated its role as the country’s largest supplier, but China’s share has increased.

95

Chart 2.69 • Public revenue Non-oil GDP, per cent

Chart 2.70 • Public expenditure Non-oil GDP, per cent

0

100

200

300

400

2011 2012 2013 2014 2015 2016(est.)

2017(budg.)

Grants Other domestic revenue Tax revenue Oil revenue

0

35

70

105

140

2011 2012 2013 2014 2015 2016(est.)

2017(budg.)

Transfers and subsidies Goods and services Wages Investment

The decline in oil revenue intensified, as observed since 2012. In turn, domestic revenue increased in absolute terms and as a percentage of (non-oil) GDP.

After the fall observed in 2015, capital expenditure increased again (particularly in the road network and the Oecusse special economic zone). Social benefits payments continue to have a very important share in the public expenditure structure.

Chart 2.71 • Petroleum fund USD millions

Chart 2.72 • Monetary aggregates USD millions

0

5,000

10,000

15,000

20,000

0

800

1,600

2,000

3,000

4,000

4,800

2011 2012 2013 2014 2015 2016(est.)

2017(budg.)Annual oil revenue

Drawings for State Budg.Value of the Fund (right-hand sc.)

0

400

800

1,200

2011 2012 2013 2014 2015 2016(est.)

2017Jun.

Broad money (M2) Net foreign assetsNet government deposits Credit to the private sector

Increased recourse to the Petroleum Fund to cover public expenditure and the decline in oil revenue and income from financial investments resulted in a virtual stagnation in the value of the Fund, following years of marked growth up to 2014.

The behaviour of foreign assets and government deposits is strongly affected by transfers between the Petroleum Fund and the Treasury account. As in 2016, there was a reduction in broad money in the first half of 2017.

Chart 2.73 • Liq. expansion/contraction factors Changes in % of initial stock of broad money

Chart 2.74 • Effective exchange rate Index: 100 = 2001, monthly averages

-150

-100

-50

0

50

100

150

200

2010 2011 2012 2013 2014 2015 2016(est.)

2017Jun.

Net foreign assets Cred. to the private sectorNet cred. to central gov. Broad money (M2)

40

60

80

100

120

2010 2011 2012 2013 2014 2015 2016 2017


[ appreciation: + ; depreciation: - ]

Jun

In 2016 the value of foreign assets stabilised somewhat, owing to lower inflows from oil exploitation. In the first half of 2017, credit to the private sector, which had stagnated since 2013, recovered slightly.

The appreciation of the USD against the currencies of Timor-Leste’s main trading partners, which began in 2011, is expected to have stabilised, no longer hampering the competitiveness of the Timorese economy, namely against Indonesia, its main trading partner.

Timor-Leste



2010 2011 2012 20132014 2015 2016 2017

Est. Est. Est. Proj.

Output and pricesTotal GDP USD millions

real annual % change

Non-oil GDP USD millions

real annual % change

% of total GDP

Inflation y-o-y % change

aver. an. % change

Public finances

Total revenue % of non-oil GDP

Domestic revenue % of non-oil GDP

Oil revenue % of non-oil GDP

Grants % of non-oil GDP

Total expenditure % of non-oil GDP

Current expenditure % of non-oil GDP

Capital expenditure % of non-oil GDP

Overall balance % of non-oil GDP

Petroleum Fund % of non-oil GDP

Money and credit

Net foreign assets(a) USD millions

rate of change(b)

months of imports

Credit to the economy (priv. s.) USD millionsrate of change(b)

Public sector net deposits USD millions

rate of change(b)

Broad money USD millions

rate of change(b)

Balance of payments

Merchandise exports (c) USD millions

Merchandise imports USD millions

Oil income (d) USD millions

Current account USD millions

% of non-oil GDP

Capital and financial account USD millions

% of non-oil GDP

Overall balance USD millions

% of non-oil GDP

Exchange rates

USD / IDR (Indonesia) average rate

USD / AUD (Australia) average rate

Nominal EERI (Index: 100 = 2001(e))

rate of change(b)

Real EERI (Index: 100 = 2001)(e) rate of change(b)

Sources: Banco Central de Timor-Leste, Ministry of Finance and General Directorate of Statistics (Timor-Leste), International Monetary Fund and Banco de Portugal calculations.Notes: (a) Does not include Petroleum Fund assets; (b) Rate of change compared with the previous December; (c) Does not include oil/gas exports; (d) Includes payments to the State by energy companies and income from Petroleum Fund investments; (e) Effective exchange rate index (EERI) calculated on the basis of the exchange rates of Timor-Leste's main trading partners. Appreciation: + / Depreciation: -.

3,972 5,685 6,724 5,636 4,054 3,102 2,867 –

-1.3 11.9 4.8 -10.9 -26.0 20.9 – –

868 1061 1247 1,402 1,463 1,606 1,695 –

10.1 7.9 5.0 2.7 4.3 4.0 5.4 4.0

21.9 18.7 18.5 24.9 36.1 51.8 59.1 –

9.2 17.4 9.1 4.0 0.3 -0.7 0.1 1.0 Jul.

6.8 13.5 11.8 8.1 0.5 0.6 -1.6 -0.1 Jul.

316 363 349 264 175 100 55 64

11 10 11 11 11 11 14 12

269 326 318 234 145 80 32 52

36 27 20 19 18 10 9 –

123 130 116 96 111 93 101 78

58 48 55 52 62 64 63 58

65 82 61 44 49 29 38 20

193 233 233 168 63 7 -46 -14

795 877 944 1,066 1,130 1,010 935 927 Jun.

622 689 1,179 1,073 757 1,015 1,092 1,027 Jun.

40.4 10.8 71.1 -9.0 -29.5 34.1 7.6 -5.9 Jun.

5.6 4.4 8.5 10.7 7.4 7.6 11.2 10.6 Jun.

110 133 160 182 192 212 208 227 Jun.

5.8 20.9 20.3 13.8 5.3 10.6 -1.9 9.1 Jun.

331 413 841 651 207 339 416 403 Jun.

60.7 24.8 103.6 -22.6 -68.2 63.6 22.7 -3.1 Jun.

295 326 407 500 600 642 734 672 Jun.

10.1 10.5 24.8 22.9 20.0 7.0 14.3 -8.4 Jun.

102 108 103 88 90 92 97 –

1,343 1,866 1,661 1,204 1,226 1,306 1,167 –

2,412 3,559 3,766 3,317 2,148 1,590 543 –

1,678 2,352 2,736 2,391 1,093 239 -528 –

193.3 221.7 219.4 170.5 74.7 14.9 -31.1 –

-1,505 -2,249 -2,320 -2,545 -1,391 -99 381 –

-173.3 -211.9 -186.0 -181.5 -95.1 -6.2 22.5 –

156 90 388 -197 -376 127 -161 –

18.0 8.5 31.1 -14.0 -25.7 7.9 -9.5 –

9,085 8,777 9,384 10,463 11,913 13,387 13,307 13,299 Jun.

1.0 0.9 0.9 1.0 1.1 1.3 1.3 1.3 Jun.

-5.3 -0.2 1.9 15.6 5.1 10.5 8.5 -2.3 Jun.

-1.0 13.1 4.9 16.4 1.3 8.1 5.1 -3.4 Jun.

97

Table 2.68 • Gross domestic productCurrent prices, USD millions

2010 2011 2012 2013 2014 2015 2016

Est. Proj.

Agriculture, fishing and forestry


of which: Extraction of petroleum and natural gas

Manufacturing, water and electricity

Construction

Trade and services

Trade, transportation, restaurants and hotels

Information and communication

Financial activities

Real estate

Professional, scient., technical and admin.

Other services


Taxes less subsidies (on products)

Gross domestic product (total)

Gross domestic product (non-oil)

Gross domestic product (oil sector)

Consumption

Private consumption

Public consumption

Gross investment



Domestic demand


Exports of oil goods

Exports of non-oil goods and services

Overall demand


Discrepancy (production/expenditure perspective)

Gross domestic product (total)

Memo item:

Non-oil GDP (real % change)

Total GDP (real % change)

Non-oil GDP (% of total GDP)

Sources: General Directorate of Statistics (Timor-Leste) (2000-15 National Accounts), Banco Central de Timor-Leste and Banco de Portugal calcu-lations.

191 194 244 279 284 281 –

3,069 4,609 5,472 4,227 2,579 1,475 –

3,069 4,608 5,471 4,225 2,578 1,473 –

10 10 10 11 12 13 –

70 165 205 268 235 286 –

366 410 450 512 494 508 –

192 217 234 233 250 289 –

45 56 62 43 43 46 –

3 8 9 11 12 12 –

100 115 151 157 177 181 –

25 30 37 42 48 49 –

66 65 51 63 61 57 –

173 202 253 307 350 382 –

29 13 -4 -5 5 32 –

3,972 5,685 6,724 5,636 4,054 3,102 2,867

868 1,061 1,247 1,402 1,463 1,606 1,695

3,104 4,624 5,477 4,234 2,591 1,496 1,172

1,539 1,626 1,777 1,768 1,888 1,887 –

630 691 800 898 937 953 –

910 936 977 871 951 934 –

478 824 731 623 636 570 –

478 821 703 602 616 553 –

0 2 28 21 21 17 –

2,017 2,450 2,508 2,391 2,525 2,457 –

4,008 5,523 6,524 5,309 3,900 2,346 –

3,920 5,428 6,401 5,217 3,824 2,276 –

88 95 123 93 77 70 –

6,025 7,973 9,032 7,700 6,425 4,803 –

2,027 2,298 2,394 2,077 2,404 1,717 –

-27 10 86 13 33 17 –

3,972 5,685 6,724 5,636 4,054 3,102 2,867

12.9 7.9 5.0 2.7 4.3 4.0 5.4

-6.7 11.9 4.8 -10.9 -26.0 20.9 –

21.8 18.7 18.5 24.9 36.1 51.8 53.9

Timor-Leste



Monthly change

Cumulative change

Year-on-year change

Average change

[1] [2] [3] [4]

2002 December2003 December2004 December2005 December2006 December2007 December2008 December2009 December2010 December2011 December2012 December2013 December2014 December2015 December2016 December

2015 JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberDecember (proj.)

2016 JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberDecember (proj.)

2017 JanuaryFebruaryMarchAprilMayJuneJulyDecember (proj.)

Sources: Banco Central de Timor-Leste, General Directorate of Statistics (Timor-Leste), International Monetary Fund and Banco de Portugal calculations.Notes: [1] month (n) / month (n-1); [2] month (n) / Dec. (prev. year); [3] month (n) / month (n) of the previous year; [4] past 12 months / previous 12 months.

– 9.5 9.5 – 4.2 4.2 7.2 – 1.8 1.8 3.2 – 0.9 0.9 1.1 – 7.3 7.3 3.9 – 8.6 8.6 10.3 – 7.5 7.5 9.0 – 1.8 1.8 0.7 – 9.2 9.2 6.8 – 17.4 17.4 13.5 – 9.1 9.1 11.8 – 4.0 4.0 8.1 – 0.3 0.3 0.5 – -0.7 -0.7 0.6

– 0.1 0.1 -1.6

0.7 0.7 0.5 0.5 0.0 0.7 0.5 0.4 0.1 0.8 0.5 0.3

-0.1 0.7 0.3 0.2 -0.1 0.6 1.0 0.3 0.0 0.6 1.2 0.5

-0.1 0.5 0.9 0.6 -0.2 0.3 0.6 0.6 -0.1 0.2 0.4 0.6 -0.1 0.1 0.4 0.6 -0.4 -0.3 -0.1 0.6 -0.4 -0.7 -0.7 0.6

– – 1.9 1.1 0.1 0.1 -1.2 0.3

-0.6 -0.5 -1.8 0.1 0.0 -0.5 -1.9 -0.1

-0.2 -0.7 -2.0 -0.3 -0.2 -0.9 -2.1 -0.5 -0.1 -1.0 -2.2 -0.8 0.1 -0.9 -2.0 -1.1

-0.1 -1.0 -1.9 -1.3 0.3 -0.7 -1.5 -1.4

-0.1 -0.8 -1.5 -1.6 0.3 -0.5 -0.9 -1.7 0.6 0.1 0.1 -1.6 – – 3.6 1.5

-0.1 -0.1 -0.1 -1.5 -0.1 -0.2 0.4 -1.3 0.2 0.0 0.6 -1.2

-0.1 -0.1 0.7 -1.1 0.2 0.1 1.1 -0.6

-0.4 -0.3 0.8 -0.4 0.3 0.0 1.0 -0.1

– – 1.0 0.8

99


2010 2011 2012 2013 2014 2015 2016

Est. Est. Est.

Current account

Trade account

Exports (a)

of which: Coffee

Imports

of which: Consumer and intermediate goods

Capital goods

Services

Exports

of which: Travel

Imports

Primary income

of which: Return on financial investments

Other primary income (oil exploitation)

Secondary income (net)

Capital and financial accountCapital account

Financial account

of which: Investment of oil savings

Foreign direct investment

External debt flows

Items in transit, errors and omissions

Overall balance

FinancingChange in net foreign assets (increase: - )

Memo items:

Current account (% of non-oil GDP)

Current account (% of total GDP)

Oil income(b) (% of non-oil GDP)

Capital and financial account (% of non-oil GDP)

Sources: Banco Central de Timor-Leste, International Monetary Fund and Banco de Portugal calculations.Notes: (a) The value of revenue from oil exports is accounted for as income and therefore is not recorded as goods exports. (b) Includes oil revenue and income from Petroleum Fund financial investments.

1,678 2,352 2,736 2,391 1,093 239 -528

-280 -373 -638 -679 -749 -635 -539

27 29 33 18 15 18 20

17 12 32 17 15 17 16

-307 -402 -672 -696 -764 -653 -559

-257 -303 -506 -552 -606 -517 -443

-50 -99 -166 -144 -159 -135 -116

-961 -1,385 -920 -437 -388 -580 -532

75 79 69 70 74 74 77

31 24 21 29 35 51 58

-1,036 -1,464 -989 -508 -462 -653 -608

2,435 3,577 3,862 3,327 2,149 1,454 543

278 312 207 275 331 611 320

2,134 3,247 3,559 3,042 1,817 979 224

484 533 432 179 84 164 -1

-1,505 -2,249 -2,320 -2,545 -1,391 -99 381

31 26 23 20 -3 29 30

-1,536 -2,275 -2,343 -2,564 -1,387 -128 351

-1,509 -2,424 -2,280 -2,556 -1,385 -212 412

55 14 51 62 47 35 -7

0 0 0 6 16 25 0

-17 -13 -28 -43 -81 -13 -14

156 90 388 -197 -376 127 -161

-156 -90 -388 197 376 -127 161

-156 -90 -388 197 376 -127 161

193.3 221.7 219.4 170.5 74.7 14.9 -31.1

39.3 41.4 41.0 42.4 27.0 7.7 -18.4

277.9 335.4 302.0 236.6 146.8 99.0 32.1

-173.3 -211.9 -186.0 -181.5 -95.1 -6.2 22.5

Timor-Leste


Table 2.71 • Goods exports(a)

Destinations as a percentage of total exports

2010 2011 2012 2013 2014 2015 2016

United States 43.2 23.3 26.1 36.3 9.8 42.9 39.0

25.3 45.1 25.4 48.0 60.9 19.5 17.6

9.0 4.2 36.0 1.7 0.1 0.1 0.6

4.2 3.7 0.9 0.0 0.2 5.1 1.2

4.3 0.9 0.6 0.9 9.1 2.3 1.6

4.1 2.3 0.3 3.4 3.0 6.2 2.6

3.7 5.4 3.8 6.4 6.2 5.6 3.2

6.1 15.1 6.9 3.2 10.8 18.3 34.3

27.1 28.7 33.3 17.7 15.5 18.0 20.0

Germany

Singapore

Indonesia

Portugal

Australia

Japan

Other

Value of exports(b)

Sources: Banco Central de Timor-Leste, General Directorate of Statistics (Timor-Leste) and Banco de Portugal calculations.Notes: (a) Excluding oil imports; (b) USD millions.

Table 2.72 • Table 72 • Goods importsTable 2.73 • Origins as a percentage of total imports

2010 2011 2012 2013 2014 2015 2016

Indonesia 32.2 28.8 22.2 26.1 28.7 30.6 30.8

15.1 6.3 6.8 9.0 22.6 18.5 11.7

7.2 17.6 6.5 5.7 7.5 10.0 19.9

1.7 4.0 7.7 11.5 6.5 7.2 2.5

4.7 2.2 4.6 5.9 6.1 6.5 6.1

8.4 4.5 3.5 2.3 3.4 3.1 2.6

3.4 1.7 3.5 1.6 2.2 1.4 1.3

2.4 1.4 1.6 1.8 5.7 1.7 1.9

1.1 2.4 1.7 1.0 3.7 2.4 2.3

23.8 30.9 41.9 35.2 13.5 18.6 21.0

307.4 401.9 672.0 696.2 764.2 652.9 559.0

Singapore

China

Malaysia

Vietnam

Australia

Japan

Portugal

Thailand

Other

Value of imports(a)

Sources: Banco Central de Timor-Leste, General Directorate of Statistics (Timor-Leste) and Banco de Portugal calculations.Note: (a) USD millions.

101

Table 2.74 • Government operationsUSD millions

2011 2012 2013 2014 20152016 2017

Budg. Est. l.e.(a) Budg.

Total revenue

Domestic revenue

Direct taxes

Indirect taxes

Other domestic revenue

Oil revenue(b)

Tax revenue from oil exploitation

Income from Petroleum Fund investments

Grants (to projects and infrastructures)

Total expenditure

Current expenditure


Expenditure on goods and services

Current transfers and subsidies

Capital expenditure

Expenditure funded by domestic resources

Expenditure funded by external grants

Overall balance

Net transfers to (+) / from (-) the Petroleum Fund

Overall balance (excl. oil revenue)

Financing

Change in treasury balances (increase: -)

Drawings from the Petroleum Fund (sust. income)Drawings from the Petroleum Fund (above sust. income)Indebtedness (disbursements)

Other (including errors and omissions)

Memo items:

Non-oil GDP (USD millions)

Overall balance (% of non-oil GDP)

Overall balance, excl. oil revenue (% of non-oil GDP)Petroleum Fund (cumulative, USD millions)

Petroleum Fund (% of non-oil GDP)

Sources: Banco Central de Timor-Leste, Ministry of Finance of Timor-Leste, International Monetary Fund and Banco de Portugal calculations.Notes: (a) Level of budget execution, per cent; (b) Includes tax revenue from gas and oil exploitation and income from Petroleum Fund financial investments.

3,854 4,351 3,698 2,555 1,612 1,908 935 49.0 1,131

109 138 151 168 170 171 231 135.2 206

28 37 40 53 53 52 66 126.8 63

51 61 64 71 66 64 79 123.6 77

30 39 46 44 50 55 54 98.2 66

3,461 3,960 3,286 2,117 1,281 1,594 543 34.1 925

3,240 3,559 3,042 1,817 979 719 224 31.1 450

221 401 245 300 302 875 320 36.5 475

284 254 260 270 161 143 160 111.6 –

1,381 1,451 1,342 1,629 1501 1,706 1,710 100.3 1,387

509 691 731 913 1023 1107 1073 96.9 1,038

112 131 142 163 170 182 174 95.7 209

254 342 392 459 425 449 434 96.7 408

143 219 197 292 428 476 465 97.7 421

872 760 611 717 467 599 637 106.4 349

– – 351 446 306 455 484 106.3 349

– – 260 270 161 143 153 106.7 –

2,473 2,900 2,356 926 111 203 -775 – -256

2,406 2,465 2,556 1,385 2 310 -823 – -154

-989 -1060 -930 -1,191 -1,170 -1,391 -1,319 – -1,181

989 1,060 930 1,191 1,170 1,391 1,319 – 1,181

-70 -478 194 443 -132 0 -77 – 0

657 654 730 632 639 545 545 – 482

399 841 0 100 640 739 821 – 597

0 22 6 16 24 107 30 – 102

4 21 0 0 0 0 0 – 0

1,061 1,247 1,402 1,463 1,606 1,480 1,695 – –

233.1 232.6 168.1 63.3 6.9 13.7 -45.7 – –

-93.2 -85.0 -66.4 -81.4 -72.9 -94.0 -77.8 – –

9,310 11,775 14,952 16,539 16,218 17,967 15,844 – –

877.5 944.3 1,066.5 1,130.5 1,009.8 1,214.0 934.8 – –

Timor-Leste


Tabl

e 2.

75 •

Mon

etar

y su

rvey

USD

mill

ions

2010

20

11

2012

20

13

2014

20

15

2016

Dec

. 16

/ Dec

. 15

2017

Jun

17 /

Dec

. 16

Dec

.D

ec.

Dec

.D

ec.

Dec

.D

ec.

Dec

.[1

] [2

] Ju

ne[1

] [2

]

Net

fore

ign

asse

ts

Fore

ign

asse

ts

Banc

o Ce

ntra

l de

Tim

or-L

este

Com

mer

cial

ban

ks

Fore

ign

liabi

litie

s

Banc

o Ce

ntra

l de

Tim

or-L

este

Com

mer

cial

ban

ks

Net

dom

estic

ass

ets

Net

cla

ims

on g

over

nmen

t

Gro

ss lo

ans

to g

over

nmen

t

Gov

ernm

ent d

epos

its

Cred

it to

the

econ

omy

Oth

er a

sset

s (n

et)

Tota

l ass

ets

of th

e ba

nkin

g sy

stem

Broa

d m

oney

Curr

ency

in c

ircul

atio

n (c

oin)

(a)

Dem

and

depo

sits

Tim

e de

posi

ts a

nd o

ther

dep

osits

Mem

o ite

ms:

Rate

of c

hang

e in

bro

ad m

oney

Infla

tion

rate

(y-o

-y ra

te o

f cha

nge)

Petr

oleu

m F

und

asse

ts (U

SD m

illion

s)

Publ

ic n

et fo

reig

n as

sets

(c)

(in m

onth

s of

impo

rts)

Sour

ces:

Banc

o Cen

tral d

e Tim

or-Le

ste, In

terna

tiona

l Mon

etary

Fund

and B

anco

de Po

rtuga

l calc

ulatio

ns.

Notes

: [1]

Perce

ntage

chan

ges f

rom

the en

d of th

e pre

vious

year

. [2]

Chan

ges i

n % of

initia

l stoc

k of b

road

mon

ey (li

quidi

ty ex

pans

ion/c

ontra

ction

facto

rs). (

a)Th

e agg

rega

te Cu

rrenc

y in c

ircula

tion o

nly in

clude

s coin

s (ce

ntavo

s, wi

th de

nomi

natio

ns

index

ed to

the U

SD) i

ssued

by Ba

nco C

entra

l de T

imor

-Leste

, excl

uding

USD

bank

notes

, as t

hese

are n

ot lia

bilitie

s of th

e Tim

ores

e ban

king s

ystem

. (b)

Publi

c net

foreig

n asse

ts co

rresp

ond t

o the

sum

of for

eign e

xchan

ge re

serve

s and

the v

alue o

f Pe

troleu

m Fu

nd as

sets.

622

689

1,17

91,

073

757

1,01

5 1,

092

7.5

11.9

1,

027

-5.9

-8

.8

650

756

1,25

11,

091

832

1,09

9 1,

157

5.3

9.0

1,08

0 -6

.6

-10.

5

406

498

884

687

311

438

281

-35.

8 -2

4.4

281

0.1

0.0

244

259

368

404

521

661

876

32.4

33

.4

799

-8.8

-1

0.5

-28

-68

-72

-18

-75

-83

-65

-22.

2 2.

9 -5

3 -1

8.8

1.7

-12

-14

-12

-12

-11

-11

-14

34.6

-0

.6

-11

-25.

3 0.

5

-16

-53

-60

-6.1

-6

4 -7

3 -5

1 -3

0.5

3.5

-42

-16.

9 1.

2

-327

-3

62

-772

-5

72

-157

-3

74

-358

-4

.3

2.5

-355

-0

.8

0.4

-331

-4

13

-841

-6

51

-207

-3

39

-416

22

.7

-12.

0 -4

03

-3.1

1.

8

22

6 0

0 0

0 0

––

0 –

–

-353

-4

19

-841

-6

51

-207

-3

39

-416

22

.7

-12.

0 -4

03

-3.1

1.

8

110

133

160

182

192

212

208

-1.9

-0

.6

227

9.1

2.6

-105

-8

3 -9

1 -1

03

-141

-2

47

-150

-3

9.3

15.1

-1

79

19.3

-4

.0

295

326

407

500

600

642

734

14.3

–

672

-8.4

–

295

326

407

500

600

642

734

14.3

–67

2 -8

.4–

3.4

3.9

4.8

6.8

9.8

12.2

14

.5

18.9

–15

.8

9.0

–

138

163

206

273

333

386

450

16.6

–36

7 -1

8.3

–

154

160

196

221

257

245

270

10.2

–28

9 7.

2–

10.1

10

.5

24.8

22

.9

20.0

7.

0 14

.3

––

-14.

1 -8

.4

–

9.2

17.4

9.

1 4.

0 0.

3 -0

.7

0.1

––

1.0

––

6,90

49,

310

11,7

75

14,9

52

16,5

39

16,2

18

15,8

44

-1.9

–16

,505

4.

2 –

69

66

91

156

165

169

148

––

152

––

103


EERI(a)

USD/AUD USD/IDR EUR/USD Nominal Real

20072008

2009

2010

2011

2012

2013

2014

2015

2016

2015 JanuaryFebruary

March

April

May

June

July

August

September

October

November

December

2016 January

February

March

April

May

June

July

August

September

October

November

December

2017 January

February

March

April

May

June

Sources: Banco Central de Timor-Leste, Reserve Bank of Australia, Bank Indonesia and Banco de Portugal calculations.Notes: (a) Effective exchange rate index (EERI) calculated on the basis of the currencies of Timor-Leste's main trading partners: Indonesia, Australia, Singapore, Portugal and Malaysia. Index: 2001 = 100. Index developments: appreciation: + / depreciation: - -.

1.2 9,140 1.3 71.3 70.0

1.2 9,690 1.4 71.4 71.2

1.2 10,412 1.3 75.1 73.7

1.0 9,085 1.3 67.6 68.5

0.9 8,777 1.3 63.9 70.5

0.9 9,384 1.2 66.0 78.8

1.0 10,463 1.3 71.0 90.6

1.1 11,913 1.3 77.0 95.3

1.3 13,387 1.1 86.9 105.1

1.3 13,307 1.1 94.3 110.5

1.2 12,574 1.1 82.4 100.7

1.2 12,754 1.1 83.7 102.4

1.2 13,064 1.0 85.2 104.2

1.2 12,944 1.0 84.5 103.3

1.2 13,122 1.1 84.7 102.9

1.3 13,313 1.1 86.0 104.1

1.3 13,375 1.0 87.0 104.8

1.4 13,782 1.1 89.1 107.1

1.4 14,396 1.1 91.7 110.2

1.4 13,796 1.1 89.5 107.4

1.3 13,673 1.0 89.6 107.1

1.3 13,855 1.0 89.8 106.6

1.4 13,893 1.0 95.3 113.0

1.4 13,525 1.1 97.0 113.2

1.3 13,198 1.1 93.9 110.8

1.3 13,177 1.1 94.0 112.4

1.3 13,381 1.1 94.1 110.8

1.3 13,359 1.1 94.1 110.3

1.3 13,120 1.1 92.9 108.4

1.3 13,147 1.1 92.6 107.7

1.3 13,119 1.1 92.9 108.1

1.3 13,017 1.1 93.1 108.2

1.3 13,324 1.0 95.3 110.6

1.3 13,420 1.0 96.8 112.6

1.3 13,362 1.0 96.2 111.1

1.3 13,338 1.0 95.6 110.0

1.3 13,345 1.0 95.6 110.0

1.3 13,308 1.0 97.1 112.3

1.3 13,319 1.1 95.1 110.0

1.3 13,299 1.1 94.6 108.8

Timor-Leste

Trade in goods between Portugal and Portuguese-speaking African Countries and Timor-Leste decreased in 2016, with exports and imports dropping by 24 per cent and 28 per cent respectively. Portuguese direct investment in these countries returned to negative levels in aggregate terms in 2016. The Portuguese-speaking African Countries’ official debt to Portugal continued to follow a downward path, which was intensified by the appreciation of the US dollar against the euro, thereby cutting the dollar value of commitments undertaken in the European currency.

Angola continued to be Portugal’s main counterparty among this group, accounting for the largest share of exports and imports of goods and direct investment. Mozambique has accounted for the largest stock of official debt to Portugal since 2015, although it is on a downward path.

3.Portugal’s economic and financial relations with Portuguese-speaking African Countries and Timor-Leste

107

Similarly to 2015, trade with Portuguese-speaking African Countries and Timor-Leste decreased in 2016. After increasing between 2011 and 2014, Portuguese exports of goods to these countries decreased substantially further, by 24 per cent from the previous year. Imports of goods from this group of countries dropped markedly for the third consecutive year (by 28 per cent from 2015). Due to the increase in trade between Portugal and the rest of the world, the share of the Portuguese-speaking African Countries and Timor-Leste as a destination and origin of exported and imported products by Portugal fell to 4.3 per cent and 1.5 per cent respectively (5.7 per cent and 2.0 per cent in 2015).

Angola contributed the most to the reduction in Portuguese exports to these countries, by 28 per cent. Products exported to Mozambique (-39 per cent) and Timor-Leste (-19 per cent) also fell. By group of products, falls in exports were more substantial in terms of machinery and equipment, base metals and food, mostly with Angola and Mozambique as a destination. Exports to the other countries grew by 21 per cent (Cabo Verde), 12 per cent (São Tomé and Príncipe) and 7 per cent (Guinea-Bissau).

As in previous years, the reduction in Portuguese imports of goods largely reflected the decrease in the mineral fuel component from Angola. Furthermore, imported products from Mozambique and Timor-Leste decreased, while those from other countries rose slightly.

Angola remains the most important market for Portugal’s trade with Portuguese-speaking African Countries and Timor-Leste, accounting for 94 per cent of Portuguese imports and 71 per cent of exports. Cabo Verde (12 per cent of exports) and Mozambique (10 per cent of exports and 4 per cent of imports) are far behind.

The fall in exports of goods led to a 22 per cent decline in Portugal’s trade surplus with this group of six countries, totalling EUR 1,322 million. The other current account items also moved downwards, chiefly reflecting developments in transactions with Angola and Mozambique: a decrease in the positive services account balance (by 28 per cent, due to lower exports of services) and reductions in primary income balances (by

45 per cent) and secondary income balances (by 11 per cent). The aggregate balance of bilateral current accounts with Portuguese-speaking African Countries and Timor-Leste fell by 26 per cent, to stand at EUR 2,914 million, the lowest figure since 2007. For the third time in a row, Portuguese emigrants’ remittances from these countries declined, particularly from Angola. Likewise, remittances from immigrants of Portuguese-speaking African Countries and Timor-Leste in Portugal decreased in 2016, most notably, to Cabo Verde, Angola and Mozambique.

Turning to Portuguese direct investment in Portuguese-speaking African Countries and Timor-Leste, there was some net disinvestment in 2016, as was the case in 2014. Estimates point to negative investment of EUR 36 million in that group of countries, but significantly below EUR 239 million in 2014. Portuguese net disinvestment in Portuguese-speaking African Countries and Timor-Leste was set against a background of increasing Portuguese direct investment in the rest of the world.

As has been the case since 2002, transactions with Angola have set the direction and magnitude of Portuguese investment in the group of countries under review. In 2016 Portuguese net disinvestment in Angola amounted to EUR 85 million, which contrasts with net investment of EUR 261 million in 2015. There was also net disinvestment in São Tomé and Príncipe in 2016 (similarly to 2015), but the other countries posted positive figures: Mozambique continued to be an attractive market for Portuguese investment (EUR 49 million, although less than in the previous year); EUR 4.7 million was channelled to Cabo Verde, up from the net negative figure in 2015; Timor-Leste and Guinea-Bissau remained at lower values (EUR 1.3 million and EUR 0.1 million respectively).

Net disinvestment in 2016 was chiefly due to the performance of the services and construction sectors in Angola and São Tomé and Príncipe. Portuguese disinvestment in the services sector occurred in spite of net investment in financial and insurance activities, a component of this sector. However, net investment in financial and insurance activities (which totalled EUR 80

Portugal's economic and financial relations with Portuguese-speaking African Countries and Timor-Leste


million), most notably the amounts channelled to Mozambique and Angola, were well below the figures for 2015 (EUR 392 million).

Direct investment flows from Portuguese-speaking African Countries and Timor-Leste to Portugal were positive in net terms in 2016, totalling EUR 23 million, but remained well below the amount recorded in the previous year (EUR 176 million). Although lowering its share in the total, Angola continued to be the main investor in Portugal in 2016, accounting for 83 per cent of the total, most notably investing in the construction sector and financial and insurance activities. Notable among the other countries were Mozambique’s investment in the construction sector (EUR 3.7 million) and net disinvestment by São Tomé and Príncipe and Cabo Verde.

Continuing the trend that started in 2014, the official debt of Portuguese-speaking African Countries to Portugal declined further in 2016. The aggregate direct and Portuguese State-guaranteed debt taken on by these countries totalled USD 2,622 million at the end of 2016, a 6.5 per cent decline from 2015. The appreciation of the US dollar against the euro intensified the reduction in official debt, as has been the case since 2014, reducing the dollar value of the commitments undertaken in euros.

The decline in the total stock of official debt of this group of countries to Portugal in 2016 was once again chiefly boosted by the reduction in medium and long-term Portuguese State-guaranteed debt, although at a much slower pace than in previous years. Also contributing to this was the extension of the downward path followed by direct debt since 2009, which was only interrupted in 2012.

Similarly to 2015, of all Portuguese-speaking African Countries, debt to Portugal in 2016 increased only in São Tomé and Príncipe. The increase was due to the use of outstanding credit lines directly granted by the Portuguese State to support private sector investment and to develop the country’s energy sector.

Angola posted the most substantial reduction in the stock of official debt to Portugal in 2016, as has been the case since 2014, dropping by

15 per cent from 2015. This decrease stemmed mainly from lower guaranteed credits (-27 per cent), adding to the contractualised redemption of its direct debt due, as established in the rescheduling agreement signed in 2004 (in effect for 25 years).

Mozambique continues to post the most substantial debt to Portugal of all Portuguese-speaking African Countries, accounting for 38 per cent of the total in 2016, although falling by 3 per cent. The decrease in Mozambican debt arose from the consecutive redemptions of direct debt under the progressive cancellation agreement signed in July 2008 under the Heavily Indebted Poor Countries Initiative, the appreciation of the US dollar against the euro and the smaller volume of guaranteed debt.

Cabo Verde’s official debt to Portugal decreased further in 2016, despite new disbursements of Portuguese State-guaranteed debt under the credit line associated with social housing projects. This decline stemmed from the scheduled redemption of other credits and developments in euro against the US dollar.

As in the past few years, in 2016 there was no movement in Guinea-Bissau’s official debt to Portugal. Once again, the appreciation of the US dollar against the European currency was the only factor behind the decline in the stock of debt, given that all credits are denominated in euro.

Timor-Leste has no official debt to Portugal.

109

Chart 3.75 • Portugal's trade relations with Portuguese-speaking African Countries and Timor-Leste % of total

Chart 3.76 • Portugal's trade relations with Portuguese-speaking African Countries and Timor-Leste in 2016 EUR millions

0

2

4

6

8

10

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Exports of goods Imports of goods

The reduction in trade with Portuguese-speaking African Countries and Timor-Leste and the increase in Portugal’s international trade with the rest of the world led to a decline in the share of these countries in terms of Portuguese exports and imports.

Portugal’s trade relations with Portuguese-speaking African Countries and Timor-Leste continued to be dominated by the Angolan market, followed at a great distance by flows with Mozambique and Cabo Verde, particularly Portuguese exports of goods to both countries

Chart 3.77 • Exports of goods to Portuguese-speaking African Countries and Timor-Leste Destinations, EUR millions

Chart 3.78 • Imports of goods from Portuguese-speaking African Countries and Timor-Leste Origins, EUR millions

0

1,000

2,000

3,000

4,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Angola CaboVerde

Guinea--Bissau

Mozam-bique

S. Tomé andPríncipe

Timor--Leste

0

400

800

1,200

1,600

2,000

2,400

2,800

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Angola CaboVerde

Guinea--Bissau

Mozam-bique

S. Tomé andPríncipe

Timor--Leste

The high relative share of the Angolan market and the upward trend in exports to Angola seen since 2015 have played a key role in the reduction in total Portuguese goods sent to this group of countries.

Angola also accounts for a large share of Portuguese imports of goods from Portuguese-speaking African Countries and Timor-Leste, with Portugal importing mainly mineral fuels from that country (crude oil and derivatives), although on a downward path following a peak in 2013.

Chart 3.79 • Exports of goods to Portuguese-speaking African Countries and Timor-Leste in 2016 By group of products

Chart 3.80 • Imports of goods from Portuguese-speaking African Countries and Timor-Leste in 2016 By group of products

23.8%

13.7%13.2%

10.1%

7.6%

31.5%

Machinery, equipment

Agricultural

Food

Chemicals

Base metals

Other

91.4%

3.8%1.4%

3.4%

Mineral fuels

Agricultural

Machinery, equipment

Other

In 2016 Portuguese exports of goods to Portuguese-speaking African Countries and Timor-Leste fell mainly into five major groups of products: machinery and equipment, agricultural products, food, chemicals and base metals. As a whole, they accounted for 2/3 of the total.

Although lower than in previous years, imports of mineral fuels from Angola dominated Portuguese imports from this group of countries, accounting for 91 per cent of the total in 2016. They were followed at a great distance by agricultural products (Mozambique) and machinery and equipment (Angola).

Exports of goods Imports of goods

Moz.



Chart 3.81 • Portuguese investment in Portuguese-speaking African Countries and Timor-LesteTotal annual amounts, EUR millions

Chart 3.82 • Investment of Portuguese-speaking African Countries and Timor-Leste in Portugal Total annual amounts, EUR millions

425352

426

-239

362

-36

2011 2012 2013 2014 2015 2016

-90

203

80

436

176

23

2011 2012 2013 2014 2015 2016

In 2016 Portugal again posted net disinvestment in this group of countries, although markedly less than in 2014. During the remainder of the decade, Portugal’s net investment in these countries was always above EUR 252 million (2010 value).

Following a peak in 2014, direct investment of Portuguese-speaking African Countries and Timor-Leste in Portugal has followed a downward path, although remaining positive in 2016. In the past few years, only 2011 saw net disinvestment of these countries in Portugal.

Chart 3.83 • Portuguese investment in Portuguese-speaking African Countries and Timor-Leste By country, EUR millions

Chart 3.84 • Investment of Portuguese-speaking African Countries and Timor-Leste in Portugal By country, EUR millions

-500

-250

0

250

500

2011 2012 2013 2014 2015 2016

Angola Cabo Verde Guinea-BissauMozambique S. Tomé and Príncipe Timor-Leste

-200

0

200

400

600

2011 2012 2013 2014 2015 2016

Angola Cabo Verde Guinea-BissauMozambique S. Tomé and Príncipe Timor-Leste

Portuguese net disinvestment in Angola was a determining factor in the performance of the total in the aggregate of Portuguese-speaking African Countries and Timor-Leste in 2016. Furthermore, Portuguese investors’ interest in the Mozambican market persists.

Although clearly falling, Angola’s investment in Portugal continued to be the most substantial among Portuguese-speaking African Countries and Timor-Leste in 2016. Of the other countries, only Mozambique’s investment in Portugal was somewhat buoyant.

Chart 3.85 • Portuguese investment in Portuguese-speaking African Countries and Timor-Leste By sector of activity, EUR millions

Chart 3.86 • Investment of Portuguese-speaking African Countries and Timor-Leste in Portugal By sector of activity, EUR millions

-400

-200

0

200

400

600

800

2011 2012 2013 2014 2015 2016

Manufacturing Electr., gas and water Construction Services Other

-200

0

200

400

600

2011 2012 2013 2014 2015 2016

Manufacturing Electr., gas and water Construction Services Other

As in most years in recent times, the performance of the services sector was key to the developments in total Portuguese investment in Portuguese-speaking African Countries and Timor-Leste. However, in 2016, other services, excluding non-financial and insurance activities, were behind net disinvestment.

Investment by these countries in Portugal in 2016 was dominated by the construction sector, accounting for 77 per cent of the total. Services posted net disinvestment, although financial and insurance activities remained somewhat buoyant.

111

Chart 3.87 • Official debt of Portuguese-speaking African Countries to Portugal USD million

Chart 3.88 • Official debt of Angola to Portugal USD million

0

1,000

2,000

3,000

4,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

Direct Guaranteed

0

500

1,000

1,500

2,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

Direct Guaranteed

Aggregate official debt of Portuguese-speaking African Countries to Portugal decreased in 2016, continuing on the downward path that started in 2014. The decrease was most notable in Portuguese State-guaranteed debt, although direct debt has also declined.

In 2016 Angola’s official debt to Portugal continued on the downward path that started in 2012, combining the reduction in Portuguese State-guaranteed debt and the redemption of direct debt as established in the rescheduling agreement signed in 2004.

Chart 3.89 • Official debt of Cabo Verde to Portugal USD million

Chart 3.90 • Official debt of Guinea-Bissau to Portugal USD million

0

200

400

600

800

2008 2009 2010 2011 2012 2013 2014 2015 2016Direct Guaranteed

0

50

100

150

2008 2009 2010 2011 2012 2013 2014 2015 2016

Direct Guaranteed

As in the previous year, in 2016 Cabo Verde’s US dollar-denominated official debt to Portugal decreased. The new disbursements of euro-denominated concessional credit lines were offset by developments in the US dollar against the European currency.

The behaviour of the euro against the US dollar is the sole determining factor of changes in Guinea-Bissau’s official debt stock to Portugal. Euro-denominated credits granted to Guinea-Bissau have not changed in 2016.

Chart 3.91 • Official debt of Mozambique to Portugal USD million

Chart 3.92 • Official debt of São Tomé and Príncipe to Portugal USD million

0

500

1,000

1,500

2008 2009 2010 2011 2012 2013 2014 2015 2016Direct Guaranteed

0

20

40

60

80

100

2008 2009 2010 2011 2012 2013 2014 2015 2016

Direct Guaranteed

Since 2015 Mozambique has been the largest debtor to Portugal among these countries, despite the reduction in its official debt. The fall in 2016 reflects the lower volume of guaranteed exports, the foreign exchange effect and redemptions following the 2008 restructuring agreement.

For the second consecutive year, São Tomé and Príncipe was the only country in this group whose official debt to Portugal increased in 2016. The increase was due to the use of credit lines granted by the Portuguese State to support the private sector and develop the energy sector.



Table 3.77 • Portugal/Portuguese-speaking African Countries and Timor-Leste: Goods imports and exports (Portugal's perspective)EUR millions

Angola Cabo Verde Guinea-Bissau Mozambique S.Tomé and Príncipe Timor-Leste Total

Imp. Exp. Imp. Exp. Imp. Exp. Imp. Exp. Imp. Exp. Imp. Exp. Imp. Exp.

1998 22 368 9 118 2 16 28 61 1 17 – – 62 58010 277 10 138 0 17 39 67 4 19 – – 64 51758 371 10 170 1 28 45 69 9 19 – – 123 657

127 504 9 135 3 23 40 63 3 21 – – 182 74570 570 9 148 3 21 37 54 0 30 1 1 121 823

2 652 9 137 2 17 38 54 0 25 1 5 52 8902 671 11 140 1 18 26 55 0 24 1 1 41 909

25 803 7 149 1 24 32 65 0 22 1 1 67 1,06453 1,210 7 190 1 27 29 73 1 28 1 2 92 1,530

369 1,682 7 228 1 35 26 89 0 33 0 1 403 2,067408 2,260 9 257 1 40 34 91 0 36 1 2 452 2,687151 2,236 7 223 1 33 43 120 0 36 1 9 204 2,656563 1,901 7 262 0 43 29 149 0 43 1 7 602 2,404

1,178 2,330 10 254 0 64 42 217 0 47 1 5 1,231 2,9161,781 2,989 9 216 0 72 16 287 0 46 0 8 1,807 3,6172,632 3,113 11 202 0 70 63 328 0 50 1 7 2,707 3,7701,606 3,178 11 215 0 65 35 318 0 57 1 7 1,653 3,8391,142 2,099 11 215 0 74 38 355 0 57 2 10 1,193 2,810

810 1,503 11 259 0 79 36 215 0 64 1 8 858 2,127

199920002001200220032004200520062007200820092010201120122013201420152016

Source: Statistics Portugal.

Table 3.78 • Share of portuguese trade held by Portuguese-speaking African Countries and Timor-Leste Per cent

Angola Cabo Verde Guinea-Bissau Mozambique S.Tomé and Príncipe Timor-Leste Total

Imp. Exp. Imp. Exp. Imp. Exp. Imp. Exp. Imp. Exp. Imp. Exp. Imp. Exp.

1998 0.1 1.6 0.0 0.5 0.0 0.1 0.1 0.3 0.0 0.1 – – 0.2 2.5 0.0 1.2 0.0 0.6 0.0 0.1 0.1 0.3 0.0 0.1 – – 0.2 2.2 0.1 1.4 0.0 0.6 0.0 0.1 0.1 0.3 0.0 0.1 – – 0.3 2.4 0.3 1.8 0.0 0.5 0.0 0.1 0.1 0.2 0.0 0.1 – – 0.4 2.7 0.2 2.0 0.0 0.5 0.0 0.1 0.1 0.2 0.0 0.1 0.0 0.0 0.3 2.9 0.0 2.2 0.0 0.5 0.0 0.1 0.1 0.2 0.0 0.1 0.0 0.0 0.1 3.0 0.0 2.2 0.0 0.5 0.0 0.1 0.1 0.2 0.0 0.1 0.0 0.0 0.1 3.0 0.1 2.6 0.0 0.5 0.0 0.1 0.1 0.2 0.0 0.1 0.0 0.0 0.1 3.5 0.1 3.4 0.0 0.5 0.0 0.1 0.1 0.2 0.0 0.1 0.0 0.0 0.2 4.3 0.6 4.4 0.0 0.6 0.0 0.1 0.0 0.2 0.0 0.1 0.0 0.0 0.7 5.4 0.7 5.9 0.0 0.7 0.0 0.1 0.1 0.2 0.0 0.1 0.0 0.0 0.7 7.0 0.3 7.1 0.0 0.7 0.0 0.1 0.1 0.4 0.0 0.1 0.0 0.0 0.4 8.5 1.0 5.1 0.0 0.7 0.0 0.1 0.1 0.4 0.0 0.1 0.0 0.0 1.1 6.5 2.1 5.5 0.0 0.6 0.0 0.2 0.1 0.5 0.0 0.1 0.0 0.0 2.2 6.9 3.3 6.7 0.0 0.5 0.0 0.2 0.0 0.6 0.0 0.1 0.0 0.0 3.4 8.2 4.8 6.7 0.0 0.4 0.0 0.2 0.1 0.7 0.0 0.1 0.0 0.0 5.0 8.1 2.8 6.7 0.0 0.5 0.0 0.1 0.1 0.7 0.0 0.1 0.0 0.0 2.9 8.1 2.0 4.3 0.0 0.4 0.0 0.2 0.1 0.7 0.0 0.1 0.0 0.0 2.0 5.7 1.4 3.0 0.0 0.5 0.0 0.2 0.1 0.4 0.0 0.1 0.0 0.0 1.5 4.3

199920002001200220032004200520062007200820092010201120122013201420152016

Sources: Statistics Portugal and Banco de Portugal calculations.

113

Tabl

e 3.

79 •

Por

tuga

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tugu

ese-

spea

king

Afr

ican

Cou

ntri

es a

nd T

imor

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ts b

y gr

oup

of p

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(Por

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EUR

2015

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114

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115.

5

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1.7

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1.6

0.1

0.0

11.1

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0.0

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19.3

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0.0

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12.4

8.5

0.3

3.8

0.6

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25.9

69.7

6.8

0.5

16.4

0.8

0.3

94.4

60.8

7.7

0.6

14.7

0.8

0.8

85.3

24.7

4.4

0.4

3.8

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33.9

15.1

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0.3

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0.8

0.0

23.3

34.4

2.3

0.4

3.7

0.3

0.1

41.1

17.2

3.3

0.3

2.4

0.7

0.0

23.8

23.7

0.7

0.1

4.2

0.3

0.0

29.0

17.3

1.4

0.1

1.3

0.4

0.0

20.5

74.8

18.8

8.6

15.0

2.9

0.1

120.

351

.222

.87.

610

.22.

30.

194

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209.

424

.83.

147

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82.

729

2.4

98.7

27.3

3.4

26.0

5.0

0.4

160.

8

522.

839

.96.

112

6.6

8.8

0.9

705.

236

0.9

48.8

6.9

74.3

13.4

2.8

507.

1

65.4

6.6

2.8

8.0

2.7

0.0

85.5

34.1

8.2

3.8

4.6

2.2

0.1

52.9

60.8

3.2

0.5

6.7

0.9

0.2

72.3

34.2

4.8

0.3

6.1

1.0

0.1

46.5

142.

18.

03.

220

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83.

017

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83.9

14.5

2.1

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7

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214.

573

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57.5

10.1

2,80

9.9

1,50

2.8

258.

878

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4.9

64.1

8.2

2,12

7.4

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Min

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fuel

s

Chem

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Plas

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Tabl

e 3.

80 •

Por

tuga

l/Por

tugu

ese-

spea

king

Afr

ican

Cou

ntri

es a

nd T

imor

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te: I

mpo

rts

by g

roup

of p

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(Por

tuga

l's p

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EUR

mill

ions

2015

2016

Ango

laC.

Ver

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sau

Moz

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S.To

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Tim

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tal

Ango

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6.5

0.4

0.0

20.5

0.0

1.7

29.1

6.8

0.0

0.0

25.0

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32.7

0.2

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0.0

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7.4

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3

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578

4.2

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30.

985

8.4

Food

Min

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s

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ce: S

tatist

ics Po

rtuga

l.

115

Table 3.81 • Current and capital accounts with Portuguese-speaking African Countries and Timor-Leste (Portugal's perspective) EUR millions

Current account

Capital account

Goods Services

Primary income

Secondary income

BalanceExp. Imp. Bal. Total

o.w.: Travel and

tourismTotal

o.w.: Remittances

Emig. Immig.

Angola 2012 3,112.8 1,631.9 1,480.9 978.5 430.2 1,017.5 279.0 270.7 15.4 3,755.8 6.9

2013 3,269.9 2,390.9 879.0 1,076.6 458.7 638.5 333.8 304.3 18.8 2,928.0 2.7

2014 3,187.5 1,479.8 1,707.7 1,235.2 544.1 200.6 179.0 248.0 13.8 3,322.5 -0.6

2015 2,108.9 1,063.4 1,045.5 1,123.0 454.1 364.4 343.9 213.1 19.5 2,876.9 -0.1

2016 1,505.4 750.8 754.6 767.5 264.2 139.5 313.5 205.9 17.5 1,975.1 -0.5

2012 210.8 13.6 197.2 -4.5 -20.9 42.9 -10.2 2.4 14.1 225.3 3.0

2013 199.2 15.3 183.9 -2.8 -16.5 21.7 -6.7 3.4 13.1 196.1 -0.0

2014 212.7 13.3 199.4 10.7 -11.0 7.9 -14.0 3.0 12.0 204.0 0.4

2015 212.3 12.0 200.4 13.0 -11.1 10.1 -10.0 1.6 17.0 213.5 0.0

2016 256.3 14.8 241.4 34.2 0.9 13.1 -14.0 1.7 14.9 274.7 -0.1

2012 71.5 2.6 68.9 3.8 1.3 0.1 -3.9 0.2 2.5 68.9 -0.5

2013 69.8 1.4 68.4 3.0 0.7 0.6 0.3 0.5 2.6 72.3 -0.0

2014 64.9 0.3 64.7 -1.5 -0.5 -0.5 -3.4 1.6 3.4 59.3 -0.0

2015 73.7 0.2 73.5 -0.4 -1.1 6.6 -1.2 2.6 3.1 78.6 -0.5

2016 78.6 0.2 78.4 11.3 0.5 -0.2 -3.1 2.2 3.2 86.4 -0.0

2012 287.0 26.9 260.1 62.6 -2.7 108.3 5.3 5.0 8.8 436.3 -16.4

2013 327.7 68.2 259.5 71.9 10.6 88.0 -3.8 7.6 10.0 415.6 -17.2

2014 317.8 45.1 272.8 113.6 41.6 29.0 -14.7 4.6 9.5 400.6 -18.3

2015 355.0 44.6 310.4 200.1 86.5 168.6 41.4 6.2 9.8 720.4 -24.1

2016 214.9 38.7 176.2 149.3 41.7 148.4 35.4 6.1 7.9 509.3 -26.1

2012 46.1 1.7 44.4 7.4 2.9 -1.0 -1.3 0.3 1.3 49.6 -1.0

2013 50.3 1.4 48.9 1.9 -1.7 -1.5 0.3 0.7 1.0 49.6 -0.9

2014 56.6 1.3 55.2 2.1 -2.5 0.3 -1.8 0.3 1.2 55.9 -0.9

2015 57.5 0.5 56.9 -2.3 -4.3 -8.0 -0.3 0.6 1.6 46.3 -1.2

2016 64.1 0.7 63.4 -3.7 -2.7 0.9 -0.7 0.5 1.9 59.8 -1.4

2012 8.1 0.2 7.9 3.2 1.6 16.0 -5.5 0.8 0.1 21.6 -0.5

2013 7.2 0.6 6.6 3.7 1.6 8.0 0.5 0.3 0.1 18.9 -0.0

2014 7.0 0.7 6.3 6.8 -0.2 -2.8 -10.1 0.2 0.9 0.2 -0.1

2015 10.1 1.4 8.7 7.3 -0.9 0.4 -8.4 0.2 0.4 8.1 0.0

2016 8.2 0.7 7.5 9.5 -0.9 -1.1 -7.0 0.1 0.3 8.9 0.0

2012 3,736.3 1,676.9 2,059.4 1,051.1 412.4 1,183.8 263.3 279.4 42.0 4,557.6 -8.5

2013 3,924.2 2,477.8 1,446.3 1,154.4 453.3 755.4 324.4 316.9 45.7 3,680.6 -15.5

2014 3,846.5 1,540.5 2,306.0 1,367.0 571.6 234.4 135.1 257.6 40.9 4,042.5 -19.6

2015 2,817.5 1,122.1 1,695.4 1,340.8 523.1 542.1 365.4 224.4 51.4 3,943.7 -25.9

2016 2,127.5 806.0 1,321.5 968.1 303.7 300.6 324.1 216.6 45.8 2,914.3 -28.0

Cabo Verde

Guinea-Bissau

Mozambique

S. Tomé and Príncipe

Timor-Leste

Total Portuguese- speaking African Countries and Timor-Leste

Source: Banco de Portugal.



Table 3.82 • Portuguese direct investment in Portuguese-speaking African Countries and Timor-Leste By sector of activity, EUR millions

2011 2012 2013 2014 2015 2016

Angola Manufacturing -12.0 -6.9 0.2 -1.1 6.6 8.1

0.1 2.7 0.3 -4.8 1.0 0.1

-266.0 -213.7 110.2 -136.5 -21.2 -12.0

632.4 644.6 208.1 -179.6 274.6 -80.6

556.2 450.8 287.9 -179.2 261.1 32.8

29.3 -13.9 -0.6 0.0 -0.1 -0.4

383.7 412.8 318.2 -322.0 260.9 -84.8

3.6 2.7 1.8 0.0 0.3 0.4

– 0.0 0.0 0.0 0.0 0.0

-44.4 -9.5 -14.3 -10.3 -11.5 0.0

15.9 7.0 21.0 12.2 10.6 4.3

15.0 10.4 20.2 3.1 7.2 3.9

-1.4 0.9 – -1.8 -0.0 -0.0

-26.3 1.0 8.5 0.1 -0.5 4.7

1.6 0.5 0.4 -0.5 -2.1 –

– – – – – –

– -10.0 0.1 0.0 0.0 0.0

0.1 0.1 0.1 -0.0 1.3 0.0

– 0.0 0.0 – 1.3 0.0

0.0 -0.1 – – 4.6 0.1

1.7 -9.5 0.6 -0.5 3.9 0.1

6.9 7.0 4.0 9.4 13.2 5.4

1.4 0.0 0.0 0.0 0.0 -0.0

-13.6 -79.2 -28.1 6.1 -23.2 2.3

112.9 11.9 101.2 64.3 121.1 41.2

108.0 32.1 80.5 61.4 122.7 39.1

-49.7 -3.8 -0.3 0.2 1.0 0.0

57.9 -64.1 76.8 80.0 112.2 49.0

– – – 0.0 0.0 0.0

– – – – -0.0 0.2

-4.9 -1.2 3.0 1.7 -4.0 -2.4

0.6 -0.5 2.2 1.0 -11.8 -4.2

0.5 -0.3 0.5 1.0 -1.9 3.9

-0.4 -0.0 – – – –

-4.6 -1.7 5.1 2.7 -15.8 -6.3

– – – 0.0 -0.4 -0.0

– – – – – –

0.0 – 0.0 – – 0.0

12.1 13.7 16.9 0.5 1.5 1.3

11.4 13.4 16.7 0.4 1.6 0.5

0.0 0.2 – – – –

12.1 14.0 16.9 0.6 1.1 1.3

424.5 352.5 426.1 -239.1 361.8 -35.9


Construction

Services

of which: Financial and insurance activities

Other

Total

Cabo Verde Manufacturing


Construction

Services


Other

Total

Guinea-Bissau Manufacturing


Construction

Services


Other

Total

Mozambique Manufacturing


Construction

Services


Other

Total


Manufacturing


Construction

Services


Other

Total

Timor-Leste Manufacturing


Construction

Services


Other

Total

Total Portuguese-speaking African Countries and Timor-Leste


117

Table 3.83 • Direct investment of Portuguese-speaking African countries and Timor-Leste in Portugal By sector of activity, EUR millions

2011 2012 2013 2014 2015 2016

Angola Manufacturing 2.3 -0.4 0.0 0.9 0.0 0.1

0.1 – – – – –

8.7 12.3 16.4 6.5 43.7 14.6

-129.6 181.4 41.8 405.3 117.8 -0.2

-152.1 164.1 34.3 397.7 80.9 6.8

21.1 10.7 18.3 18.8 6.1 4.7

-97.4 204.0 76.5 431.5 167.7 19.2

– – – -0.0 – –

– – – – 0.0 0.0

1.4 0.4 4.8 3.8 1.3 -0.6

3.7 1.3 2.3 0.8 0.9 0.5

0.4 0.2 -0.2 -0.2 -0.2 0.1

0.7 0.0 – – -0.0 –

5.8 1.7 7.1 4.5 2.2 -0.1

– – – – – –

– – – – – –

– – – 0.0 -0.1 -0.0

– – – 0.0 -2.1 0.0

– – – – – –

0.0 0.1 – – 0.0 0.0

0.0 0.1 0.0 0.0 -2.2 -0.0

-0.0 -0.4 0.0 0.9 0.0 0.1

-0.0 – – – 1.5 –

– -0.5 -0.8 -0.8 2.1 3.7

-0.1 -1.3 -0.7 -0.1 2.8 0.4

– -1.6 -0.5 -0.1 2.2 0.4

-0.3 0.0 – – 0.0 –

-0.5 -2.1 -1.4 -0.0 6.4 4.2

-0.1 – – – – –

– – – – – –

– -0.1 -2.2 -0.0 -0.0 0.0

-0.0 -0.9 -0.1 – 2.7 -0.3

-0.0 – 0.1 – 2.1 0.0

-0.5 – – – 0.0 –

-0.6 -1.1 -2.3 -0.0 2.7 -0.3

– – – – – –

– – – – – –

– – – – -0.9 0.0

2.2 -0.0 -0.0 -0.0 -0.3 -0.0

2.2 – – -0.0 -0.3 –

-0.0 0.0 0.0 0.0 -0.0 0.0

2.2 0.0 -0.0 -0.0 -1.1 -0.0

-90.5 202.6 79.9 436.0 175.6 23.1


Construction

Services


Other

Total

Cabo Verde Manufacturing


Construction

Services


Other

Total

Guiné-Bissau Manufacturing


Construction

Services


Other

Total

Moçambique Manufacturing


Construction

Services


Other

Total

São Tomé e Príncipe

Manufacturing


Construction

Services


Other

Total

Timor-Leste Manufacturing


Construction

Services


Other

Total

Total Portuguese-speaking African Countries and Timor-Leste




Table 3.84 • Official debt of Portuguese-speaking African Countries to PortugalUSD millions

Direct debt to the State (1) Medium and long-term State-guaranteed debt (2) Official debt (1)+(2)

Due In arrears Total Due In arrears Total Due In arrears Total

Angola

Cabo Verde

Guinea- Bissau

Mozambique

S. Tomé and Príncipe

Total Portuguese--speaking African Countries

Source: Ministry of Finance - GPEARI.

2012 586 – 586 984 – 984 1,570 – 1,570

2013 558 – 558 897 – 897 1,456 – 1,456

2014 530 – 530 672 – 672 1,203 – 1,203

2015 502 – 502 423 3 427 926 3 929

2016 475 – 475 304 8 312 778 8 787

2012 187 – 187 318 – 318 505 – 505

2013 208 – 208 451 – 451 659 – 659

2014 181 – 181 494 – 494 675 – 675

2015 160 1 160 472 – 472 632 1 632

2016 152 – 152 473 0 473 625 0 625

2012 70 60 129 – – – 70 60 129

2013 71 66 138 – – – 71 66 138

2014 61 62 123 – – – 61 62 123

2015 53 59 112 – – – 53 59 112

2016 50 61 110 – – – 50 61 110

2012 376 – 376 803 – 803 1,178 – 1,178

2013 367 – 367 878 – 878 1,245 – 1,245

2014 355 – 355 775 – 775 1,131 – 1,131

2015 341 – 341 699 – 699 1,041 – 1,041

2016 324 – 324 683 – 683 1,008 – 1,008

2012 38 – 38 37 – 37 75 – 75

2013 44 – 44 39 – 39 83 – 83

2014 43 – 43 35 – 35 78 – 78

2015 53 – 53 36 – 36 89 – 89

2016 57 0 57 35 – 35 92 0 92

2012 1,256 60 1,316 2,142 – 2,142 3,398 60 3,458

2013 1,248 66 1,315 2,265 – 2,265 3,514 66 3,580

2014 1,171 62 1,233 1,976 – 1,976 3,147 62 3,209

2015 1,110 60 1,170 1,630 3 1,633 2,740 63 2,803

2016 1,058 61 1,119 1,495 8 1,503 2,553 69 2,622

BANCO DE PORTUGAL E U R O S I S T E M A

2016 | 2017

Evolução das economias dos PALOP e de Timor-Leste

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