ASTANA, Kazakhstan, March 2. S&P Global Ratings has affirmed its 'BBB-' long-term and 'A-3' short-term sovereign credit ratings on Kazakhstan with a stable outlook, Trend reports.
The transfer and convertibility (T&C) assessment remains at 'BBB'. At the same time, S&P affirmed the 'kzAAA' Kazakhstan national scale rating.
The stable outlook on the 'BBB-' long-term rating on Kazakhstan reflects S&P view that risks from weaker growth and relatively high external financing needs are mitigated by planned governance and economic reforms, as well as strong asset buffers.
It was noted that S&P could lower the rating if Kazakhstan's external position and fiscal deficits worsened beyond current projections. This could be the case if imports continued to grow strongly or if the Caspian Pipeline Consortium (CPC) pipeline were incapacitated for an extended period and caused a pronounced decline in oil exports.
Continuing geopolitical uncertainty and lower oil prices than in 2022 are raising Kazakhstan's gross external financing needs and weigh on fiscal performance. In 2023, the government relied more on asset transfers from the National Fund of the Republic of Kazakhstan (NFRK) to meet funding gaps due to revenue shortfalls. S&P expects slower increases in government spending and ongoing economic reforms will moderate the twin deficits over 2024-2027 compared with 2023.
The country's strong fiscal and external balance sheets were built primarily with budgetary surpluses from the period of high commodity prices that ended in late 2014. The related assets were accumulated in the NFRK and largely invested abroad. These assets started declining in 2015 and stabilized in 2021. S&P forecasts that the economy's liquid external assets will continue to comfortably exceed external debt in the next few years.