British consultancy Oxford Economics projects that Angola’s average inflation will slow to 10.6% in 2026, down from 20.2% recorded in 2025 — a deceleration that could allow the Banco Nacional de Angola (BNA) to cut its benchmark interest rate again in November.

“The Consumer Price Index (CPI) data for September reinforces our view that inflation will slow to an average of 10.6% in 2026, compared with 20.2% in 2025,” the consultancy’s analysts wrote in a note assessing price developments in Angola.

For 2027, Oxford Economics forecasts average inflation will rise again to 13.3%. The consultancy attributes this projected uptick to food price pressures linked to the El Niño weather phenomenon, higher election-related expenditure, and a potential depreciation of Angola’s currency, the kwanza.

The case for a November rate cut is underpinned by annual inflation slowing to 8.4% in September, compared with the same month of 2025 — marking the 26th consecutive month of deceleration from a peak of 31.1% in July 2024.

“The latest CPI data tips the balance towards another rate cut in November, but we do not expect another large cut, given that the policy rate has already been reduced by 225 basis points across the last two Monetary Policy Committee (MPC) meetings, and food still accounts for more than two-thirds of overall inflation,” the consultancy said in the note, sent to clients and seen by Lusa.

Oxford Economics therefore considers a reduction of between 50 and 75 basis points the most likely outcome, provided the kwanza remains stable. The forecast follows the BNA’s decision to cut its benchmark rate from 17% to 15.75% in July, and then to 14.75% in September.

The July reduction of 125 basis points was justified by an improved short-term inflation outlook, supported by higher oil prices and kwanza exchange rate stability. The September cut brought the cumulative reduction across the last two MPC meetings to 225 basis points.

Angola’s Secretary of State for Finance and Treasury, Ottoniel dos Santos, said in an interview with Lusa last week, on the sidelines of the annual meetings of the International Monetary Fund (IMF) and the World Bank in Bangkok, Thailand, that inflation is one of the areas where results have exceeded expectations. He highlighted the development in the context of an overall improvement in the country’s economic indicators in 2026.

“Inflation was forecast to close 2025 at 18% and it is currently at 8.4%,” Ottoniel dos Santos said. He added that the sustained decline in prices could open the door to the full adoption of an inflation-targeting regime by the central bank.

“This presupposes that, as early as next year, the BNA could implement what it has been preparing — a management framework based on an inflation target,” Ottoniel dos Santos said.