Standard & Poor’s (S&P), an international rating agency, reaffirmed Kazakhstan’s sovereign credit rating at BBB-/A-3, with a stable outlook, as reported by the Kazakh Ministry of National Economy on March 1. The agency stated that the stable outlook on the ‘BBB-’ long-term rating on Kazakhstan reflects their view that risks from weaker growth and relatively high external financing needs are offset by planned governance and economic reforms, as well as strong asset buffers.
S&P analysts anticipate that Kazakhstan’s liquid foreign assets will continue to significantly exceed its external debt in the coming years. This robust financial position underpins the stable rating outlook and reflects confidence in the country’s ability to manage its finances effectively.
The report highlights that economic growth in Kazakhstan has been driven by activity in the construction, industry, trade, information, and communication sectors. Government stimulus measures, including infrastructure development and further diversification, have been noted as key factors contributing to this growth.
Continuing geopolitical uncertainty and lower oil prices than in 2022 are raising Kazakhstan’s gross external financing needs and weighing on fiscal performance. In 2023, the government relied more on asset transfers from the National Fund of Kazakhstan to meet funding gaps due to revenue shortfalls. The agency expects slower increases in government spending and ongoing economic reforms will moderate the twin deficits over 2024-2027 compared with 2023.
These reforms are expected to sustain the country’s investment-grade rating by bolstering its economic resilience. The government of Kazakhstan is committed to actively working towards maintaining its sovereign rating at an investment-grade level. This ongoing effort is crucial for attracting foreign investment and supporting the nation’s long-term economic stability, as stated by the Kazakh ministry.
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