S&P Global Ratings (S&P) has released the results of the review of the 2021 sovereign credit rating for Botswana. S&P affirmed the country’s sovereign credit rating for long and short-term foreign and local currency sovereign credit at “BBB+/A-2” but maintained the negative outlook on account of the risks that the COVID-19 pandemic continues to pose to the country’s economic and fiscal performance over the next 12 months.
The BBB+ and A-2 credit ratings, as affirmed, are underpinned and supported by the country’s strong, stable and predictable institutional framework; modest net general government debt levels; relatively strong net external position; and positive impact of monetary policy framework, all of which support enduring macroeconomic stability. S&P notes that ratings for Botswana largely depend on international developments that include, among others, the trajectory of the COVID-19 pandemic, vaccination rates and related extent of future human and goods movement restrictions which could influence the demand for diamonds.
The rating agency indicated that the economic outlook could be revised to stable if Botswana’s public budget performance improves, as that would halt further declines in fiscal and external buffers. The ratings could also be lowered if thesustainable recovery in the demand and prices for diamonds falters, resulting in weaker fiscal and external performance than the credit agency’s current forecasts.
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Disclaimer: Bank of Botswana published this content on 19 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 March 2021 15:24:04 UTC.