Fitch affirms Kazakhstan's sovereign rating at BBB


Rating agency Fitch Ratings has confirmed the sovereign rating of Kazakhstan. Thus, the sovereign credit rating of the country is at the level of BBB, the outlook is stable.

According to the agency, the country's strong fiscal position and significant external reserves, which contributed to resilience to external shocks, remain a key factor in maintaining the country's rating.

Fitch estimates international reserves stood at 37.8% of GDP at the end of 2021, well above the median for countries with similar credit ratings. At the same time, Kazakhstan's dependence on commodities, high inflation and an underdeveloped economic policy program are noted.

According to the agency, high prices for key export commodities and an increase in oil production at the Tengiz field by 2024 will balance the impact of the geopolitical situation in the region.

Fitch analysts predict a peak in inflation in the first half of 2023, while expecting an average inflation of 9.5%. The agency emphasises the commitment of the National Bank to a floating exchange rate, which contributes to the absorption of shocks.

Fitch also emphasised the sufficient capitalisation of the banking sector and pointed to an improvement in its performance. According to analysts, high interest rates on deposits in the national currency and a number of other measures helped prevent the outflow of deposits, as well as keep the level of dollarisation of deposits and loans almost unchanged.

By Zhanna Shamsutdinova for LS (Kazakhstan).