Fitch downgrades Zambia to B

Fitch Ratings said it downgraded Zambia's long-term foreign and local currency issuer default ratings to B from B+.

The foreign currency senior unsecured bond ratings were also downgraded to B from B+.

The outlook is stable.

Simultaneously, the short-term issuer default rating was affirmed at B and the country ceiling downgraded to B+ from BB-.

The authorities expect a deficit of 8.5% of GDP in 2013, against an expected deficit at the time of the budget of 4.5% and an average of 2%-3% between 2006 and 2011. The overshoot largely reflects overspending on subsidies, a risk Fitch has highlighted in the past, which will total 4% of GDP, against 0.7% in the budget, the agency said.

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