Angola Outlook Revised To Negative On High Government Debt Burden; 'B-/B' Ratings Affirmed

OVERVIEW Angola's general government debt as a percentage of GDP, net of liquid assets, increased significantly in 2018, partly due to the impact of the sharp depreciation of the Angolan kwanza on the government's foreign currency-denominated debt stock. We expect a forecasted lower average Brent oil price of $55 per barrel in 2019-2022 to swing Angola's fiscal and current accounts into deficits over the medium term. Nevertheless, the government's efforts to reform the business environment should support higher economic growth and help stabilize debt levels from 2019 onward. We are revising the outlook on Angola to negative from stable and affirming the long- and short-term sovereign credit ratings at 'B-/B'. The negative outlook reflects the possibility of a downgrade if

...OVERVIEW + Angola's general government debt as a percentage of GDP, net of liquid assets, increased significantly in 2018, partly due to the impact of the sharp depreciation of the Angolan kwanza on the government's foreign currency-denominated debt stock. + We expect a forecasted lower average Brent oil price of $55 per barrel in 2019-2022 to swing Angola's fiscal and current accounts into deficits over the medium term. + Nevertheless, the government's efforts to reform the business environment should support higher economic growth and help stabilize debt levels from 2019 onward. + We are revising the outlook on Angola to negative from stable and affirming the long- and short-term sovereign credit ratings at 'B-/B'. + The negative outlook reflects the possibility of a downgrade if the high government debt burden makes Angola's financing needs unsustainable, or if fiscal or external pressures lead to larger-than-expected twin deficits. RATING ACTION On Feb. 8, 2019, S&P Global Ratings revised...

Ratings Action