Angola's reforms and IMF program will only be felt in the medium term

Angola's Standard & Poor's analyst said that the impact of the IMF program will only be felt in the medium term, and explained that current economic difficulties justify a Negative Evolution Outlook.

"Angola has systemic problems which had a strong impact last year, such as the low price of oil and the difficulties in producing oil blocks. Everything has converged into this great recession, but it is true that at the same time, there is a positive change that offsets these negative factors, although its effects will only be felt in a few years," said Ravi Bathia.

Speaking to Lusa the day after Standard & Poor's downgraded the Economic Evolution Outlook from 'stable' to 'negative', Ravi Bathia argued that the accumulation of public debt is one of the country's biggest problems.

"These negative factors had a huge impact, and with the liberalization of the exchange rate, we have already seen a large increase in the public debt/GDP ratio. And since much of this debt is in foreign currency, the ratios have skyrocketed, the level is very high," said the analyst in charge of Angola, who is also one of the directors of the sovereign credit analysis department.

On Monday, S&P announced it has decided to downgrade Angola's outlook, rating the country below the investment recommendation level - or as 'junk', as it is usually known.

Asked about the reasons why S&P expects a positive economic development in the coming years while at the same time downgrading the country's Economic Evolution Outlook, Bathia argued that it is a matter of time and added that the measures negotiated with the IMF under the $3.7 billion financial aid program will take time to bear fruit.