LONDON, October 03 (Fitch) Fitch Ratings has affirmed Republic of Congos Long-term foreign and local currency IDRs at B+. The Outlooks are Stable. Fitch has also affirmed the rating on the 2029 Eurobond at B+ ,the Short-term foreign currency IDR at B and the Country Ceiling at BBB-, in line with the Country Ceiling for the Communaute Economique et Monetaire dAfrique Centrale (CEMAC). KEY RATING DRIVERS The Republic of Congos B+ IDRs reflect the following key rating drivers: The sovereigns balance sheet is strong as a result of oil-related fiscal surpluses (10% of GDP on average since 2010) and external debt cancellation. Fitch expects government deposits will reach 19% of GDP and official foreign reserves six months of current account payments at end-2014. Non-oil GDP is growing rapidly, supported by high public investment. The rating is constrained by oil dependence (70% of government receipts and 80% of external receipts) and weak structural indicators and public finance management. Fitch expects the budget surplus will decline to 4% of GDP in 2014, from 8% in 2013, mainly due to higher public investments. We expect the budget surplus will then increase to 7% of GDP by 2016, as investment spending declines. Oil receipts will gradually decline as a percentage of GDP as the expected increase in production (to 340,000 barrels per day in 2017 from 261,000 in 2014) is offset by lower oil prices (USD95 per barrel by 2016 from USD105 in 2014
Posted on: Sat, 04 Oct 2014 00:48:32 +0000
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