Moody's Sees Credit Pressures Easing for Sub-Saharan Africa

(Bloomberg) -- Credit pressures in some sub-Saharan African nations should ease in 2019 as credit profiles display some resilience at their lower rating levels, Moody’s Investors Service said as it sees regional economic growth expanding at a faster pace than last year.

Growth in gross domestic product for the region will probably accelerate to 3.5 percent this year from an estimated 2.8 percent in 2018, Moody’s said in an emailed statement Monday.

“Moody’s expects government debt ratios to deteriorate only marginally or stabilize in 2019, reflecting ongoing fiscal consolidation and the positive impact of higher growth rates on the denominator of debt to GDP,” the company said. “Debt trajectories for a number
of sovereigns remain vulnerable to lower-than-expected growth, exchange-rate depreciations and contingent liability risk from weak state-owned enterprises.”

Fifteen of the 21 sovereigns that Moody’s rates in sub-Saharan Africa have a stable outlook, while six hold a negative stance, it said.

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