"Following the sharp currency depreciation and the reduction in oil production, the level of public debt and debt service costs as a percentage of GDP will increase significantly this year, and this will put significant pressure on payments from 2024", write S&P analysts in the note accompanying the decision to maintain the rating at B-, below the investment recommendation level.
Oil production volumes "have fallen in recent months and the high exposure to production volatility poses a risk to growth and the budgetary position", says S&P, stressing that, even so, high prices, around US$85 per barrel until 2026, and the gradual fiscal consolidation, prevent a more substantial deterioration of fiscal and debt metrics".
Thus, "the rating was maintained at B- and the 'outlook' stable", that is, two levels below the investment recommendation, point out the analysts in the note that reviews economic growth, from 2.3 to 0.9 per percent this year, and 1.2 percent in 2024, with public debt returning above 90 percent until at least 2026, returning to levels close to those faced by Angola during the economic recession of the second half of the last decade.
The 40 percent devaluation of the kwanza against the dollar since the start of the year will make foreign currency debt payments more expensive, with S&P noting that Angola's debt costs could rise by more than 60 per cent. percent in the second half of this year, as the country will have to disburse more than US$7 billion this year, and an average of US$7.8 billion between 2024 and 2026, "with most of the debt service this year to be related to bilateral debt to China".
