IBERSOL • 2023 Integrated Management Report

STRATEGIC FRAMEWORK Employment growth will moderate its momentum, in line with the expected evolution of activity. The pace of productivity growth is expected to normalise over the 2023-2026 period, above the growth seen in recent years, but in line with that seen before the pandemic. The unemployment rate was 12.1% in 2023 and is expected to fall pro- gressively until it reaches 11.3% in 2026, which, if it does, would be below the historical average seen over the last four decades (16.8%), but above the historic low reached in 2007 (8.2%). . Situation in Angola Recent IMF data indicates that in 2023 Angola’s economic recovery took a heavy hit from a double shock in the first half of the year, as the oil sector weakened and the debt moratorium ended. GDP growth is estimated to have fallen from 3% in 2022 to 0.5% in 2023, with a 6.1% contraction in the oil sector and growth in the non- oil sector slowing to 2.9%. Overall inflation rose significantly in 2023, to 20% year-on-year at the end of December (13.8% in 2022) driven by the depreciation of the Kwanza and the cut in fuel subsidies in mid-2023. In response to the shock, the authorities tightened fiscal policy in the second half of 2023, cutting capital expenditure and related goods and services, and implementing the first phase of the fuel subsidy reform. The Public Debt/GDP ratio is expected to have risen by 19 p.p. to around 84% of GDP in 2023, driven by a significantly weaker exchange rate. The depreciation of the Kwanza in June 2023 helped the economy adjust to the reduction in oil exports and preserve international reserves, which remained at around 7 months of import cover. Economic growth is expected to recover in the short term, supported by improved oil production and the recovery of the non-oil sector. Inflation is expected to remain temporarily high in 2024 and gradually 28