Baku, Azerbaijan, Jan. 19
By Ali Mustafayev – Trend:
S&P Global Ratings affirmed its 'BBB-/A-3' long- and short-term foreign and local currency ratings on the Republic of Kazakhstan.
The outlook is stable. The agency also affirmed Kazakhstan national scale rating at 'kzAA'.
“The stable outlook reflects our expectation that, over the next two years, there will be no further significant financial implications arising out of the dispute. We could raise the ratings if, contrary to our expectations, recent political reforms result in a significant strengthening of Kazakhstan's institutions. We could also raise our rating on Kazakhstan if the government's diversification strategy were to result in a more broadly based export basket, reducing the economy's exposure to volatile terms of trade dynamics,” S&P said in a message.
The ratings could come under pressure if Kazakhstan's external performance deteriorates beyond the agency’s base-case expectations, for example, if additional material external assets of the NFRK (the National Fund of the Republic of Kazakhstan) were to be frozen or S&P’s projections for gross external financing needs were to rise beyond 100 percent of current account receipts plus usable reserves, according to the message.
S&P also expects the Kazakh economy to expand on average by 3 percent over 2018-2021, supported by government investment spending and stronger exports as the oil price outlook marginally improves and oil production from the Kashagan field accelerates.