Economic growth in Angola will slow to an annual average rate of 3.5 percent during 2015 and 2016 – compared with 4 percent last year – on weak oil prices, the International Monetary Fund said.

Ricardo Velloso, African division chief of the Washington-based institution, had earlier headed a two-week visit to Angola by a team of experts in order to assess the economy and fiscal strength of Africa’s second largest oil producer in Africa.

“Economic activity is projected to slow down as the industrial, construction and services sectors adjust to cuts in private consumption and public sector investments,” Mr Velloso said in a press conference on Tuesday, quoted by news agency Reuters.

Oil output represents 40 percent of gross domestic product (GDP) and more than 95 percent of export revenue in Angola, according to the Reuters report.

The IMF predicted the budget deficit in Angola would account for 3.5 percent of GDP this year, compared with 6.5 percent last year, due to the government’s timely reaction to a fall in international oil prices. The African nation slashed its spending in the 2015 budget by 1.8 trillion kwanza (US$14.35 billion) to 5.4 trillion kwanza.

“Recent developments underscore the importance of promoting the diversification of the economy” in Angola, Mr Velloso said. He added that economic growth should start accelerating in 2017.