(Bloomberg) -- Angola’s central bank is expected to either hike interest rates or stay on hold when it meets on Friday, as policymakers balance the need to encourage economic growth against curbing high inflation.

Four economists surveyed by Bloomberg were evenly split on whether the monetary policy committee will act or show patience after inflation hit a 21-month high of 24% in February.

Two economists, including from Absa Group Ltd., predict the central bank will increase the benchmark rate by 100 basis points to 19% after keeping rates unchanged at a previous meeting in January. That would take rates to the highest level in 15 months. The other two forecast the policy benchmark will remain unchanged.

Central Bank Governor Manuel Tiago Dias has said that officials were waiting to see if their decision to raise rates in November by 100 basis points to 18% would be enough to tame inflation.

Yet price pressures, which mounted in 2023 following a sharp depreciation of the kwanza and a government decision to phase out fuel subsidies, have remained strong.

Angola Finance Minister Vera Daves de Sousa said Tuesday the country remains committed to putting an end to fuel subsidies.

What Bloomberg Economics Says...

“The central bank will be inclined to hike rates to rein in inflation and stabilize the kwanza. They can’t rely on foreign exchange sales alone to prop up the currency.”

—  Yvonne Mhango, Africa economist

Antonio Estote, an independent economist and professor at the Universidade Lusiada de Angola, forecasts the central bank to keep the benchmark interest rate unchanged in order to protect much-needed economic growth. Manuel Alves da Rocha, an economics professor at the Catholic University of Angola in Luanda, also predicts the central bank will keep rates unchanged. 

“The central bank is very conservative when it comes to increasing rates and I don’t believe they will raise borrowing costs at this time,” Alves da Rocha said in a telephone interview from Luanda. 

The Angolan economy is expected to grow 2.2% in 2024 on the back of government programs to stimulate the non-oil sector, compared with 0.7% in the previous year, the governor said on Jan. 19.

©2024 Bloomberg L.P.