Fitch lowers rating of Gabon owing to lower oil prices
Washington – The rating agency Fitch lowered the rating Friday of Gabon in particular citing the impact of falling prices oil will weigh on its ability to develop this sector of its economy.
The note was lowered to B + with a stable outlook. The decline of Gabonese oil production increases sensitivity to oil price shocks of the sovereign rating and the economy as a whole, says Fitch.
The agency call that continental deposits mature and that Offshore exploration is just beginning. The Gabon can not rely on production to offset price shocks, she added, indicating that the budgetary consequences of the fall in prices will weigh on the country’s ability to develop its offshore deposits.
The diversification of the economy into other sectors as oil is slow and is likely to be impacted by the reduction in the public investment program, said Fitch.
The agency expects the budget deficit should reach 3.5% of gross domestic product this year and continue over the following years, even if these forecasts will depend on oil prices and the implementation of the cost reduction program.
Gabon was hit in March by strikes of public servants who are demanding wage increases and the oil sector was also affected by a social movement in December.
Fitch notes that Gabon, has not served the oil sector revenues to create a sovereign fund and that the reserves of the central bank are relatively low.
In return, the foreign debt is relatively low (about 34% of GDP in 2015) but should grow so that Gabon should appeal to international debt markets this year.
(© AFP / May 8, 2015 10:40 p.m.)
(AFP / 08.05.2015 10:43 p.m.) ->
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