Moody's Investors Service has assigned first-time Ba3 local and foreign-currency issuer ratings to the government of the Republic of the Congo. The outlook on the ratings is stable.
The main drivers of the Republic of the Congo's Ba3 rating are:
- A small and concentrated economy that has robust growth prospects;
- Weak institutional strength, despite the country's participation in the Economic Community of Central African States (ECCAS), which makes a positive contribution to its institutional framework;
- Strong fiscal fundamentals, with the government expanding its already large net external position;
- Moderate susceptibility to event risk mainly arising from political risks.
Moody's believes that positive ratings pressure could develop in the event of continued foreign investment in the oil and mining sector, leading to stronger growth and government revenues; a substantial increase in fiscal buffers, thus increasing the ability to smooth any negative external shocks on the economy; continued strengthening of institutional weakness, which is a long-term constraint on the ratings; and increased transparency in the management of the wealth accumulated by the government.
Downward pressure on the rating could develop following: sustained deterioration of the fiscal and/or external accounts, leading to the depletion of net foreign assets; or a severe deterioration in the domestic political environment.
About the government of the Republic of the Congo
GDP per capita (PPP basis, US$): 4426 (Per Capita Income)
Real GDP growth (% change): 3.8 (GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 5.0
Gen. Gov. Financial Balance/GDP: 6.5 (Fiscal Balance)
Current Account Balance/GDP: -1.3 (External Balance)
External debt/GDP: 28.1
Level of economic development: Low level of economic resilience
Default history: At least one default event (on bonds and/or loans) has been recorded since 1983.
Source: Moody's Investors Service
