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Investing.com -- S&P Global Ratings has confirmed its 'B-' long-term and 'B' short-term sovereign credit ratings on Angola on February 14, 2025. The outlook on the long-term rating is stable, with the transfer and convertibility (T&C) assessment also at 'B-'.
The rating affirmation follows the Angolan government's reduction of outstanding external debt by $4 billion in 2024, easing short-term liquidity pressures. However, the country continues to face risks including fiscal slippage, vulnerability to external shocks such as oil price fluctuations, and a high level of dollarization in the economy.
The Angolan economy is projected to grow by an average of 2.7% from 2025 to 2028. This growth is expected to be driven by steady oil production volumes and improvements in non-oil sector activities. Despite this, fiscal and public debt vulnerabilities remain significant due to large debt service, costly fuel subsidies, and rapidly increasing wage costs.
The stable outlook for Angola balances the country's large external funding needs and financing risks over the next 12 months with the supportive oil revenue and available foreign currency reserves. However, a deterioration in the external environment or an increase in social pressures could lower the rating if these factors limit the government's ability to service its commercial debt.
On the other hand, the rating could improve if Angola's economic growth is more substantial and sustained, along with further reduction in its debt-servicing burden and borrowing costs. This could stem from either structural increases in oil and gas production or investment in domestic agricultural, manufacturing, or industrial production capacity that raises Angola's per capita trend growth.
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