International consulting firm Moody’s Investors Service has affirmed on Monday Botswana’s A2 long-term local and foreign currency issuer ratings.
Communique from the firm received here on Monday indicated that Botswana’s outlook remains stable, adding that the affirmation reflects credit strengths and challenges captured at the A2 rating level.
“The low debt burden, strong debt affordability indicators and a sizeable sovereign wealth fund continue to support fiscal strength, despite the gradual erosion of fiscal buffers, while solid institutions and prudent policymaking support macroeconomic stability,” reads part of Moody’s statement.
The consultants further indicated that the economy’s small size, slow progress towards diversification and long term structural challenges constrain economic strength, while a large public sector, heavy reliance on a single commodity for growth, exports and budget revenues, and an increasingly rigid expenditure structure, constrain fiscal flexibility.
Moody’s further said the balance of risks is unlikely to change over the next 12-18 months.
Botswana’s GDP is expected to grow by 3.9 percent in 2020, after expanding by an estimated 3.6 percent in 2019, driven mainly by the recovery of mining activity and improvement in the non-mining sectors supported by the accommodative monetary conditions and gradual reform progress to improve the business environment, according to Moody’s. Enditem