Dagong assigns BB- credit rating to Angola with stable outlook

Dagong Global Credit Rating Co., Ltd., China's domestic rating agency, announced Friday that it has assigned local and foreign currency sovereign credit ratings of BB- to the Republic of Angola, each with a stable outlook. Despite its fast growth, Angola's economy relies heavily on the oil industry and lacks sufficient buffers to hedge against risks that could hamper its fiscal and foreign exchange strengths, Dagong said. The agency forecast that Angola's economic growth will hit 6.9 percent and 7.2 percent in 2013 and 2014, respectively. However, limited oil reserves, insufficient domestic investment and an irrational industrial structure will restrain Angola's economic expansion in the long run, when it could potentially fall to 5 percent, according to Dagong. Angola's fiscal deficit rate in 2013 and 2014 will be 2.5 percent and 2.9 percent, respectively, according to the agency. Angola is weak in debt repayments, because about 80 percent of its fiscal revenue comes from the oil industry and insufficient fiscal reserve funds, Dagong added.