"The financial services and banking sector faces a considerably more challenging prospect in the short term due to the economic consequences of the covid-19 pandemic," analysts write in a commentary on the sector.
In the text, sent to investors and accessed by Lusa, the analysts of this consultancy held by the same owners of the financial ratings agency Fitch Ratings, read that "although the country has achieved relative success in containing the pandemic, the collapse of the oil process worldwide, the suspension of many international routes and internal disturbances will still push the country into recession this year.
As a result, they continue, Fitch Solutions "expects a negative cycle in market demand, with a weaker appetite for loans to customers and, outside the health insurance sector, less activity in the insurance and investment-related services sectors.
In the analysis, Fitch Solutions consultants say that "even with economic pressures, the banking sector in Angola was already dealing with several structural challenges," such as low asset quality and rising government debt, which "limits the space for private sector lending.
In this context, "and with a moderate pace of kwanza depreciation over the next few quarters, there is likely to be a slowdown in credit growth over the next few years before there is a marginal recovery" in the medium term, conclude the analysts.
Fitch forecasts a four percent recession this year and a recovery in economic growth of up to two percent by 2024, according to the latest forecasts of this consultancy.
