Standard & Poor’s has downgraded the sovereign credit rating of Angola from “B +” to “B” due to the fall in the price of oil, the country’s main export product leading to an increase in debt, according to a statement released Friday.

Maintaining a “stable” outlook, Standard & Poor’s (S&P) said that in addition to oil prices being lower than expected in the 2016/2019 period, domestic and foreign loans that the government of Angola has taken on, along with the devaluation of the currency, mean that public debt is on an upward trajectory.

“We anticipate that Angola’s public debt this year will reach 50 pecen of gross domestic product,” the agency said.

S&P explained the “stable” outlook with the forecast of a gradual decline of the Angolan deficit, thereby reducing the risks to external financing, also taking into account the government’s response to the crisis, to prevent the deterioration of the fiscal position and debt .

“We anticipate gross external financing needs of Angola of approximately US$31 billion this year and next, of which about half will be short-term,” noted Standard & Poor’s.

In the same statement, the agency projects economic growth for Angola of 3.3 percent in 2016 and a budget deficit of around 7 percent by 2019, which will be funded mainly by external loans. (macauhub/AO)