Fitch Ratings has affirmed Kazakhstan's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB' with a Stable Outlook.
Kazakhstan's 'BBB' IDRs balance strong fiscal and external balance sheets underpinned by accumulated oil fiscal revenues, against a high dependence on commodities and lower, but improving, governance scores relative to 'BBB' rated peers. Government indebtedness remains low and external and fiscal buffers have been resilient to the coronavirus and oil price shocks.
Large sovereign external buffers are a key rating strength and are forecast to remain robust.
The combined external assets of the state oil-fund (NFRK) and official international reserves held by the central bank (NBK) rose to USD94 billion or 57% of GDP at end-2020 (2019: 50%), boosted by global financial asset returns including rallying gold prices, and limited foreign exchange sales. Sovereign net foreign assets, of 49% of GDP at end-2020, are significantly larger than the current 'BBB' median of -2.4%, but should moderate to 43% by end-2021 and 39% in 2022 as fiscal oil revenue savings recover only gradually relative to nominal GDP growth.
