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Standard & Poor's lowers Zambia's sovereign credit rating
LUSAKA, July 2 (Xinhua) -- Standard & Poor's, an international rating agency, has lowered Zambia's long-term sovereign credit rating due to the widening budget deficit, a statement seen by Xinhua on Thursday said.
The rating agency has lowered the southern African nation's sovereign rating to "B" from "B+" but has affirmed its "B" short- term rating.
"In our opinion, Zambia's fiscal position is markedly and negatively deviating from our previous expectations. We believe the government's policy response will be constrained in the run-up to September 2016 elections," the statement added.
The agency has however given the country a stable outlook on the premise that the fiscal deficit will not weaken over 2015 to 2018 than currently anticipated.
Zambia's widening fiscal deficit has caused consternation in the southern African nation.
While the government has projected that the fiscal deficit will be above 4.6 percent announced in the 2015 budget, the International Monetary Fund (IMF) said the fiscal deficit could hit 7.7 percent.
On Monday, Fitch, another international rating agency expressed concern over the country's increasing budget deficit which it said may prove costly to finance.
The agency has since revised its economic outlook for Zambia to stable from positive.
Zambia's fiscal position has become increasingly strained, with the government saying in its mid-year economic and budget review that the 2015 expenditure would increase by 8 percent while revenues, mainly related to the mining sector, would decline. Enditem
