S&P Global Ratings on Aug. 11 downgraded Angola's long-term foreign and local currency sovereign credit ratings to B- from B due to lower fiscal revenue and rising debt service costs amid weak economic prospects.
The rating agency cut its real GDP growth average forecast for Angola to 2.3% from 3.3% for the years until 2020, citing weak oil and non-oil sectors strained by a shortage of foreign currency.
Meanwhile, Angola's debt service and interest expenditure are both expected to top 15% of government revenues in 2017, up from 7% in 2015, S&P Global Ratings said.
As part of the ratings action, S&P Global Ratings raised Angola's outlook to stable from negative, as it predicted the country's current account deficit to average 7% from 2017 to 2020, down from an earlier forecast of 7.5%.
S&P said it could further lower Angola's ratings due to risks arising from fiscal stress or a weakening political situation after the Aug. 23 elections. The ratings could be upgraded if the new administration implements economic reforms that support faster economic growth.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.