BAKU, Azerbaijan, December 6. Fitch Ratings has affirmed Kazakhstan's 'BBB' Issuer Default Rating, citing robust external buffers and significant oil revenue savings as key strengths, Trend reports.
According to the outlook, the country boasts the third-strongest sovereign net foreign asset position among its 'BBB' peers, providing notable financing flexibility. However, challenges such as high dependence on commodities, export concentration risks, inflationary pressures, and weaker governance indicators weigh on its economic outlook.
The National Fund of the Republic of Kazakhstan (NFRK) reported foreign-currency assets of $60.6 billion in October 2024, a slight increase from $60 billion at the end of 2023. Official foreign exchange reserves also rose significantly to $45.9 billion, up from $35.9 billion, collectively amounting to 38% of GDP. The NFRK’s performance was supported by an 8.2% return on investments, although budget transfers partially offset gains, while rising gold prices bolstered FX reserves.
Fitch forecasts a widening current account deficit, expected to reach 2.9% of GDP by 2026, driven by recovering import growth and declining oil prices.
Moreover, oil production is projected to fall by 2 million tons to 88 million tons in 2024 due to temporary shutdowns but is expected to rebound to 99 million tons by 2026 with the completion of the Tengiz oil field expansion. Output may see a slight decline thereafter, Fitch noted.