"Further improvements in the credit rating are unlikely this year as the financial needs and risks of such funding remain relatively high," the analysts write in a commentary on Standard & Poor's rating improvement on Friday.
"Unsurprisingly", they point out, S&P improved its opinion on Angola's credit quality from CCC to B-, following the example of Fitch Ratings, the previous week, and Moody's, even last year.
"Funding requirements resulting from external debt repayments are expected to increase from 2023 onwards, when operations under the Debt Service Suspension Initiative (DSSI) expire", the analysts write in the note sent to clients, and to which Lusa had access.
For these analysts, the price of oil will be at 80 dollars per barrel at the end of this year and should fall to 65 dollars by 2024, as "the global supply will accompany the increase in global demand".
This price drop, they say, "will cause a stagnation in the growth of oil revenues during 2023 and 2024, which will put additional pressure on the financing needs" of Angola.
In addition, they conclude: "Another additional downside risk to our forecast of stronger fiscal metrics over the medium term is whether growing discontent with the current government and the completion of the program with the International Monetary Fund have led to excessive public spending in a context general election this year".
The financial rating agency Standard & Poor's on Friday improved Angola's rating to B-, predicting that the economy had already emerged from recession last year, growing by 0.2 percent, and accelerating to 2.3 percent this year.
"The government's reform program, higher oil prices, and debt relief from some official creditors are reducing immediate liquidity risks, we expect economic recovery and a smaller currency depreciation than between 2018 and 2020 to sustain continued decline in the level of debt, so we improved Angola's rating from CCC+ to B-", reads a note from Standard & Poor's.
In the note, S&P explains that it attributes a perspective of stable evolution to the assessment of credit quality, balancing "the still large external financing needs and the associated risks, with the gradual fall in government debt levels until 2025".
