S&P Global Ratings has affirmed Kazakhstan’s sovereign credit rating at ‘BBB-’, maintaining a stable outlook. The agency highlighted Kazakhstan’s sustained economic growth, particularly in the non-oil sector, which continues to play a significant role in GDP expansion.
According to S&P’s forecast, oil production growth, coupled with government investments in economic diversification and social security, will drive GDP growth to 4.9% in 2025 and 3.4% in 2026.
Kazakhstan’s economic growth remained strong in 2024, with real GDP increasing by 4.8%, slightly lower than the 5.1% recorded in 2023. The non-oil sector expanded by an estimated 5.5%, supported by growth in agriculture, construction, and trade. However, oil production saw a slight decline due to OPEC+ production limits, averaging 1.54mn barrels per day in 2024, down from 1.60mn in 2023.
Government stimulus measures, including increased spending on infrastructure, wages, and social security, have played a crucial role in sustaining economic growth. The expansion of the Tengiz oil field is expected to further boost oil output, with total production projected to reach 96mn tons in 2025 and 106mn tons in 2027, up from 88mn tons in 2024.
S&P acknowledged the National Bank of Kazakhstan’s (NBK) efforts in containing inflation and strengthening monetary policy. The inflation rate is expected to decline to 8.6% by the end of 2024, with further stabilization of deposit dollarization and the national currency’s exchange rate. By 2028, inflation is projected to reach the NBK’s target of 5%.
Kazakhstan’s trade relations with Russia remain significant, though exports to Russia have declined due to sanctions and shifting trade patterns. Imports from Russia accounted for approximately 30% of Kazakhstan’s total imports in 2024, down from over 40% before the Russia-Ukraine conflict. The country primarily exports iron ore and uranium to Russia, while importing machinery, refined petroleum, and metal products.
Despite geopolitical challenges, Kazakhstan continues to rely on the Caspian Pipeline Consortium (CPC) pipeline, through which 80% of its oil exports pass. Efforts to diversify export routes, including the Baku-Tbilisi-Ceyhan (BTC) pipeline, have seen limited progress due to higher costs and logistical hurdles.
Kazakhstan’s fiscal deficit reached 4.3% of GDP in 2024, driven by increased government spending and lower-than-expected oil revenues. To address budget shortfalls, the government has relied on transfers from the National Fund of the Republic of Kazakhstan (NFRK) and domestic borrowing.
The country is implementing fiscal reforms aimed at reducing reliance on the NFRK, broadening the tax base, and enhancing budget efficiency. A new tax code is set to be introduced in 2026, focusing on increasing VAT rates, adjusting corporate income tax, and improving tax collection through digitalization.
Kazakhstan’s external position remains stable, supported by significant foreign reserves. The country’s gross foreign exchange reserves rose to $45.8bn at the end of 2024, up from $36bn a year earlier. The NFRK’s foreign assets stood at $58.8bn, reflecting strong investment income despite higher fiscal spending.
S&P noted that Kazakhstan’s net external creditor position remains robust, thanks to its moderate external debt and substantial foreign assets. However, the country’s exposure to fluctuations in gold prices remains a risk, as gold constitutes over 50% of its reserves.
S&P Global Ratings indicated that an upgrade of Kazakhstan’s credit rating could occur if the government successfully implements reforms to accelerate non-oil sector growth and enhance fiscal management. Conversely, downside risks include potential external shocks, weaker fiscal discipline, or geopolitical instability affecting trade and investment.
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