Moody’s downgrades Angola’s outlook from stable to negative

6 March 2015

Credit rating agency Moody’s downgraded its outlook on Angola, from stable to negative, maintaining the current credit rating at “Ba2”, due to risks of falling oil prices, the agency said in a statement issued Thursday.

Moody’s cautioned, however, that if current conditions continued it was more likely that it would lower its credit rating.

“The restatement of a Ba2 credit rating is supported by the strength of Angola’s economy and the government’s budgetary cushions,” whilst the decline in outlook “is driven by the risks to economic growth, public finances and the external payments position resulting from a decline in oil prices,” Moody’s said in its statement.

In the explanations given for keeping Angola’s credit rating unchanged Moody’s noted that “despite the sharp drop in oil prices and the uncertainties surrounding the medium term, Angola’s sovereign debt profile ruler shows a number of strengths,” starting with the forecast growth, “which likely will remain positive, at around 3 percent this year.”

Moody’s bases its growth forecast for Angola’s economy (a value which is less than half that predicted by the government in the amending State Budget) “on increased oil production this year with new projects to make production reach 1.83 million barrels per day, an increase from the average of 1.66 million in 2014.” (macauhub/AO)