BAKU, Azerbaijan, September 29. Moody's Ratings
has today affirmed the Government of Kazakhstan's local and foreign
currency long-term issuer ratings at Baa1, with a stable outlook,
Moody's announced.
At the same time, the agency affirmed the foreign currency
senior unsecured debt and MTN programme ratings at Baa1 and (P)Baa1
respectively.
"The affirmation of Kazakhstan's Baa1 ratings reflects its
strong fiscal position, supported by a low government debt burden,
high debt affordability and sovereign assets that provide
additional capacity to absorb economic shocks. The economy has
continued to expand despite lower oil production and disruptions to
the main oil export route, demonstrating the growing contribution
of non-oil sectors", Moody's said.
The agency noted that ongoing investment in digital, transport
and energy infrastructure will further support medium-term growth
and deepen economic complexity.
These strengths are balanced by Kazakhstan's exposure to
regional geopolitical risks, institutions that remain relatively
weak despite gradual improvement, and longer-term carbon transition
risks, according to the ratings agency.
The stable outlook reflects balanced risks at the Baa1 rating
level. Ongoing institutional, economic and fiscal reforms may
strengthen Kazakhstan's credit profile if they are sustained and
implemented effectively.
Governance and banking sector reforms are expected to support
policy effectiveness and financial stability. However, the full
credit benefits will take time to become evident and remain subject
to implementation risks, Moody’s noted.
Sustained infrastructure investments, development of the digital
economy and movements up the value chain within the manufacturing
sector may raise economic complexity, while tax reforms could widen
the revenue base. Kazakhstan also remains exposed to geopolitical
disruptions to oil exports, while renewed domestic political risks
or weaker reform implementation could dampen investment and
longer-term economic prospects.
Kazakhstan's local and foreign currency country ceilings remain
unchanged at A2 and A3, respectively.
According to Moody’s, the two-notch gap between the local
currency ceiling and the sovereign rating balances the economy’s
exposure to a key revenue source and the still relatively large
domestic footprint of the government through its holding companies
against the country's stable external position, given its net
creditor status and increasingly predictable and transparent
policies.
"The one-notch gap between the foreign currency ceiling and
local currency ceiling takes into consideration the authorities'
commitment to flexible exchange rates and open capital accounts,
supported by the large pool of foreign assets that reduces the risk
of transfer and convertibility restrictions", Moody's said.
