IBERSOL | Annual Report 2021

Economic Framework on the side of supply kept inflation high, mostly because of the price of food products, which, in turn, was pressured by the increase in import prices, disruptions of supply, and transport restrictions, worsened by pandemic-related restrictions. Angolan authorities continued to be firmly committed to their agenda of economic reform. Beginning with the National Development Plan, showed a strong commitment to difficult, yet critical reforms, including fiscal consolidation with the implementation of VAT to fluctuating inter- est rates, and took some bold steps, despite the challenging environ- ment of the Covid-19 pandemic, to achieve sustainable, inclusive, and diversified growth. At the end of 2021 the Kwanza increased 20% in value compared to the main currencies, a trend which has carried into 2022. FINAL COMMENT The Russian invasion of Ukraine at the end of February led to a deterio- ration of global economy growth forecasts in the short run, and greater inflationist pressures. The conflict also caused a sudden rise in oil and gas prices in the international markets, which reflects the importance of Russia in the supply of these raw materials. It also meant increased uncertainty and geopolitical risk, with negative effects on financial mar- kets and agents’ confidence. The conflict could cause new disruptions to global supply chains, especially those that depend on Russian pro- duced raw materials, or regional transport of goods. The recent surge in Covid-19 cases in some Asian economies and the imposition of restric- tions could aggravate these disruptions. 14