Fitch Ratings kept Angola’s sovereign risk rating unchanged at “B”, meaning it remains highly speculative and is not considered to be investment grade, but revised the outlook for economic growth from “negative” to “stable,” according to a report issued on Tuesday.
The agency explained it had revised the outlook based on improvements in the economy following the introduction of a new exchange rate regime, from a fixed rate system to a system in which market forces determine the exchange rate, as well as the adoption of an ambitious reform agenda.
The reform agenda includes monetary, budgetary and structural adjustments that are expected to reduce external vulnerabilities and improve public finances, according to Fitch Ratings analysts.
The agency expects Angola to register economic growth of 2.3% this year, which will increase to 2.5% in 2019, with the budget deficit expected to fall to 5.4% this year, after having reached 6.8% in 2017.
Public debt increased to 66.6% of Gross Domestic Product (GDP) at the end of 2017, when it was 50.7% at the end of 2015,” the analysts noted, anticipating that public debt will reach a peak of 67.5% by the end of this and start falling from 2019 to reach 58.7% of GDP in 2020. (macauhub)