WINDHOEK, Nov. 21 (Xinhua) -- Credit rating agency Fitch Monday downgraded Namibia's long-term foreign-currency Issuer Default Rating to BB+ from BBB- with a stable outlook.
Fitch's announcement follows Moody's rating agency's August decision to downgrade Namibia's long-term senior unsecured bond and issuer ratings to junk status, which Windhoek dismissed as premature and potentially speculative.
In a statement on its official website, Fitch said the downgrade also reflects a weaker-than-expected economic recovery and in its view, the medium-term growth has shifted to a lower gear.
Fitch said key factors that led to the downgrade include the temporary interruption of fiscal consolidation in 2017.
The agency predicted that the public debt-to-GDP ratio of the Southwest African country will continue to rise in the medium term.
The ratings agency, however, forecast that the general government deficit will narrow to 6 percent of GDP from 6.9 percent in 2016, as compared with a revised government target of 5.3 percent.
Fitch also forecast that GDP growth in Namibia will decelerate to 0.8 percent in 2017 from 1.4 percent in 2016.
Moreover, the country's economic outlook remains lacklustre, the agency said.
"We project GDP growth to strengthen to 2 percent in 2018 and 3 percent in 2019, well below the 2010-2015 average of 5.7 percent. The growth will be driven by the rebound in crop production, steady growth in mining output, and stabilization of public investment," said Fitch.