Fitch Ratings has lowered Angola’s credit rating from “B +” to “B” with a negative outlook, and in 2016 expects the worst Angolan economic performance in 14 years, according to a statement issued on Friday.
The agency said that Angola continues to face a “severe oil shock,” considering that 95% of Angolan exports are oil and half of the country’s tax revenues come from these sales, which have fallen sharply since the end of 2014, due to low oil prices.
“The oil sector maintains some momentum, but Fitch Ratings expects the economy to grow 0% in 2016, falling from 3% in 2015 and the worst performance in 14 years [since 2002, the end of the civil war],” the statement said.
The agency also forecasts average inflation of 30% in 2016, below the forecast of 38.5% set by the government and 38.1% already seen in August (year on year) and is also more optimistic about budget deficit forecast, which amounts to 5.8% of GDP in 2016, against 6.8% set by the government in the revised State Budget (OGE).
Fitch predicts that the average price of oil on the international will remain at around US$42, while in the revised state budget the Angolan government lowered its forecast from US$45 to US$41 per barrel. (macauhub)