BAKU, Azerbaijan, Feb. 5
Trend:
Kazakhstan's GDP growth is projected at 3.9 percent in 2022, an international credit rating agency Fitch Ratings said, Trend reports referring to the press service of the National Bank of Kazakhstan.
The international rating agency Fitch Ratings has confirmed the sovereign credit rating of the Republic of Kazakhstan at the level of "BBB", so the outlook is "stable", which reflects a strong fiscal position and significant external reserves.
The agency noted that despite the January events in the country, their impact on the growth path of the economy is insignificant as a whole. GDP growth in 2022 is projected at 3.9 percent. The planned increase in oil production in accordance with the OPEC+ agreement, the growth of global demand for natural resources, investments in large energy projects, as well as the recovery of agricultural production will support the growth of Kazakhstan's economy.
The country's significant external reserves remain the key factor in maintaining the credit rating. According to Fitch Ratings, at the end of 2021, international reserves amounted to 46 percent of GDP, which is well above the median for a group of countries with a comparable credit rating. At the same time, the country's dependence on commodities, higher inflation, and an underdeveloped economic policy program in comparison with a group of countries with a comparable credit rating are mentioned.
Analysts at Fitch Ratings forecast an inflation rate of 7 percent by the end of 2022, and a return of inflation to the target corridor by the end of 2023. The Agency emphasizes that reducing inflation is a priority and separately notes economic response measures, including measures to stabilize inflation along with a more expanded plan to improve the socio-economic situation.
Fitch Ratings also highlighted improvements in banking sector regulation and supervision practices, and pointed to an improvement in its performance: NPLs reached a historically low level of 3.3 percent, capital adequacy and liquidity were maintained. At the same time, the level of deposits dollarization remains higher compared to the group of countries with a comparable credit rating, as well as the rapid growth of lending, in particular, mortgage lending.
According to Fitch Ratings, the dynamics of the credit rating will depend on further political and social development, improvement of public administration, as well as on the direction of economic policy.