Fitch Ratings keeps Mozambique’s credit rating unchanged at “B+”

19 May 2014

Fitch Ratings has kept its credit rating on Mozambique at “B+” with a stable outlook, according to a statement published Friday.

The agency kept its rating unchanged as Mozambique’s economy had posted average growth of 7 percent, “substantially higher than the average of 4.2 percent associated to a B rating” over the last five years as well the fact that the country has significant natural resources, investment in infrastructure and “a favourable macro-economic climate.”

Fitch Ratings also noted that inflationary pressure had reduced and that the country’s currency had risen in value and had “an improved monetary policy.”

In the statement, the agency said that exploration of natural resources such as coal and natural gas would allow for continued robust growth of around 8 percent over the next three years based on foreign investment of around US$5 billion per year.

The agency warned, however, of the risks associated to delays in construction of infrastructure, a drop in commodity prices and increased political unrest.

As well as this Mozambique is posting higher budget deficits each year, of 12.8 percent of GDP in 2014, compared to 9 percent in 2013, which “raises doubts about the government’s commitment to a prudent budgetary policy.” (macauhub/MZ)