Baku, Azerbaijan, Feb.15
Trend:
Russia’s Analytical Credit Rating Agency (ACRA) has affirmed the credit ratings of Kazakhstan at BBB+ level, improving the outlook from ‘negative’ to ‘stable’, Trend reports referring to the press office of the government.
According to the ACRA’s updated report, the factors for the sustainability of estimates are the potential for further economic growth, the effectiveness of structural, economic and monetary policies, access to markets and funding sources, and debt sustainability.
Kazakhstan's sovereign credit rating is driven by a relatively high level of prosperity, moderate levels of government debt, a significant amount of liquid assets in the country's National Fund, and sufficient international reserves. The change in the outlook for the sovereign credit rating from ‘negative’ to ‘stable’ is due to the weakening of risks associated with external and internal shocks in 2020.
Last year, the growth rate of the country’s economy amounted to -2.6 percent, which is a much more stable indicator both in comparison with the group of developed countries (-5.4 percent) and compared with the group of developing countries (-5 percent). ACRA expects economic growth to recover in 2021 to 3.8 percent.
For this year, ACRA forecasted inflation's return to the target band (4–6 percent) due to a decrease in pressure on the national currency and the exhaustion of the 2020 inflationary shock’s effect.
In 2020, the depreciation of the tenge against the US dollar averaged 8 percent and was notably below the level recorded during the previous crisis (54 percent in 2016).
Kazakhstan ended the crisis year with a moderate growth in public debt compared to many developed and developing countries.
ACRA estimated the increase in public debt to 24.5 percent of GDP at the end of 2020 as moderate and expects that the level of public debt will remain stable during 2021 amid a narrowing budget deficit and economic recovery. A stable and moderate level of public debt give Kazakhstan opportunities to implement countercyclical fiscal policy in the future. The room for maneuver increases the resilience of Kazakhstan's economy to potential external shocks.
According to the ACRA, lately positive changes have occurred both in public and state institutions of the country. Besides, the agency noted the importance of creating the Supreme Council for Reforms and the Agency for Strategic Planning and Reforms, which indicates Kazakhstan's focus on reforming the public administration system.
Improving human capital is another positive long-term factor. According to the World Bank's estimates for 2020, the human capital index of Kazakhstan exceeded the average level for the Central Asian countries and was one of the highest within a comparable group of countries.
ACRA was established in Moscow on November 20, 2015 by the decision of the Bank of Russia. The shareholders are 27 Russian companies and financial institutions, including Raiffeisenbank, Sberbank, Alfa-Bank, Gazprombank and Moscow Exchange MICEX-RTS.