Kazakhstan’s BBB Rating Affirmed by Fitch with Stable Outlook
Fitch Affirms Kazakhstan’s Credit Rating at ‘BBB’ with Stable Outlook
The Fitch credit rating agency has reaffirmed Kazakhstan’s long-term foreign currency issuer default rating (IDR) at ‘BBB’ with a stable outlook, as reported in the latest Fitch ratings released on May 17.
Key factors contributing to this rating include the country’s strong sovereign external and fiscal balance sheets, which have shown resilience to shocks, as well as financing flexibility supported by accumulated oil revenue savings. However, challenges such as high dependence on commodities, export concentration risk, high inflation, and weak governance indicators are noted in the report.
Despite these challenges, Kazakhstan boasts significant external buffers, foreign currency reserves, a stable fiscal position, low public debt levels, and moderate geopolitical risks. The report also predicts an increase in annual oil production in 2023, primarily due to the completion of the Tengiz oil field expansion.
Fitch views Kazakhstan as being at relatively low risk of broad-based secondary Western sanctions, thanks to the country’s implementation of banking sector sanctions and re-export measures. However, GDP growth slowed to 3.8% in 2024, down from 5.1% in 2023, with factors like reduced investment, construction, and credit growth, as well as consequences of severe flooding in the north-west contributing to this decline.
Looking ahead, the rating agency expects GDP growth to accelerate to 5% in 2025. Progress on economic diversification, particularly in the middle-corridor transportation sector and renewable energy investments, is noted in the report, but it is acknowledged that further efforts are needed to significantly increase the share of non-energy GDP.
