The financial rating agency Standard & Poor's has decided to keep Mozambique's rating at 'C', with a stable outlook, considering that there are still risks of delays in debt payments in local currency.

"The government is implementing measures to avoid these payment delays and progress in fiscal consolidation is underway, but the risks of further payment delays remain possible, in our opinion," writes Standard & Poor's (S&P), quoted by Lusa.

This, he explains, "is due to the potentially higher costs of reforming public salaries, high expenditure to deal with climate shocks and the risk of a fiscal slippage on the eve of next year's elections."

In the same note, the analysts state that they continue to "consider the government's capacity to service commercial debt to be weak until the projected gas revenues arrive".

S&P had already downgraded Mozambique's rating to 'Selective Default' in June due to delays in domestic debt payments at the beginning of the year, on average nine days after the deadline, but upgraded the rating shortly afterwards, in a move that only served to signal that delays in debt payments have consequences for the rating.

Analysts expect GDP to expand by 4.8% this year and 5.5% between 2024 and 2026, with public debt improving to 74% of GDP this year and remaining above 70% until 2026.

"We estimate that debt payments in local currency this year and next will cost 310 million dollars a year, and will rise significantly to 530 million dollars in 2025 and 2026," the analysts write, stressing that the debt restructuring at the end of the last decade means that payments in foreign currency will also rise voluminously from next year.