Fitch Ratings has affirmed Cote d'Ivoire's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+'. The Outlook is Positive.
KEY RATING DRIVERS
The Positive Outlook reflects our expectation of continued commitment to fiscal prudence and reforms by the Ivoirian authorities. This will set Cote d'Ivoire's general government (GG) debt on track to stabilise well below the current 'B' and 'BB' medians over the medium term, despite a temporary hit to public finances and economic growth from the coronavirus pandemic-related shock. It also reflects the strong outlook for Cote d'Ivoire's economy, in line with its continued growth outperformance against rating peers since 2012, while comparatively moderate external and fiscal deficits and low inflation will limit risks for macroeconomic stability. These rating strengths are balanced against ongoing political risks, high dependence on agricultural commodities and comparatively low development indicators.
The deterioration in the external environment and national prevention measures to stem the spread of the pandemic will impact economic activity in a broad range of domestic sectors. The contraction in external demand will weigh on exports, while domestic investment will be affected by disruptions to ongoing large-scale infrastructure projects and a slump in FDI inflows. Increased budget spending of around 1.5% of GDP in 2020 under the government's economic relief plan will partially cushion the impact of the coronavirus outbreak on domestic demand.
