Kazakhstan’s Economic Growth Rate Falls Below Forecasts: S&P Global Ratings
The S&P Global Ratings international rating agency has affirmed Kazakhstan’s credit rating at BBB with a stable outlook. This rating is lower than the levels set in the country’s program documents, highlighting concerns about inappropriate budget forecasting, as reported by the Halyk Finance analytical center.
The oil and gas sector in Kazakhstan plays a crucial role in maintaining this positive rating, accounting for 20% of GDP, over half of exports, and 30% of government revenues. However, a decline in oil production has negatively impacted economic growth rates, with a moderate forecast of 3.7% GDP growth expected by the end of the current year according to Halyk Finance.
S&P Global Ratings anticipates moderate economic growth for the next three years, with the launch of the Tengiz future expansion project in the second half of 2025 not expected to push GDP growth beyond 4.5%. The agency predicts an average GDP growth rate of 3.7% per year in the period of 2025-2027.
Despite the slow progress of privatization and concerns about centralized decision-making, weak checks and balances, censorship, and corruption perception, the agency points out positive factors such as Kazakhstan’s strong external net creditor position and high levels of liquid assets held by the government.
To improve the current rating, S&P Global Ratings suggests implementing reforms, boosting growth in the non-oil sector, reducing geopolitical risks, and ensuring political stability. These measures could lead to an upgrade in the country’s credit rating.
