Fitch: Zambia view to negative

Fitch Ratings said it revised the outlooks on Zambia’s long-term foreign- and local-currency issuer default ratings to negative from stable and affirmed both ratings at B.

Fitch also affirmed Zambia’s short-term issuer default rating at B and country ceiling at B+, along with its senior unsecured foreign- and local-currency bonds at B.

The outlook revision reflects a combination of falling copper revenue and slowing growth, which led to persistent and large fiscal deficits and a doubling of gross general government debt since 2012, Fitch said.

The agency said it forecasts the 2016 fiscal deficit to narrow slightly to 7.1% of GDP, materially higher than the 3.8% deficit forecast by the Zambian authorities in the 2016 budget.

These persistent fiscal deficits and a depreciating exchange rate have led to an increase in gross general government debt, which rose to 51% of GDP as of year-end 2015, Fitch said.

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