Angola's economy is expected to grow at a faster rate this year as the country's oil production rebounds, a report from the International Monetary Fund said Monday.

Growth in Africa's third largest economy is estimated to accelerate to 6.8 percent in 2012 from 3.9 percent last year, despite the recent decline in oil prices, and to ease to 5 percent next year.

The IMF executive board that concluded a review of the Angolan economy assessed that though the country's non-oil tax revenue is set to increase on tax administration reforms it will not fully offset the decline in oil revenue implied by oil price and production projections.

The country's overall fiscal balance is seen moving to a modest deficit by 2016, while the debt profile is expected to remain manageable, albeit vulnerable to oil revenue shocks.

The IMF, meanwhile, cautioned that although Angola's growth outlook is favorable, the country remains vulnerable to oil revenue shocks amid a large infrastructure gap and widespread poverty. The lender stressed the need for maintaining a prudent fiscal stance, anchored by a transparent spending envelope.

It also called on the government to continue phasing out quasi-fiscal operations conducted by the state-owned oil company, incorporating them into budgetary operations. The IMF also urged the authorities to take steps to further improve non-oil tax revenue collection and contain fuel subsidies and to strengthen the international reserves buffer.

RTTNews