BAKU, Azerbaijan, December 9. Fitch Ratings has affirmed the city of Almaty's Long-Term Issuer Default Ratings (IDR) at ‘BBB’ with a stable outlook, Trend reports.
The rating reflects the city’s strong financial profile, despite its ‘Weaker’ risk profile. Almaty’s Standalone Credit Profile (SCP) remains at ‘bbb+’, supported by a robust financial profile assessed at ‘aaa’, with expectations that the city’s payback ratio will stay below 5x through 2028. The city’s IDRs are capped by Kazakhstan’s sovereign rating, which is one notch below its SCP.
Fitch has assessed Almaty’s risk profile as ‘Weaker’, primarily due to limited fiscal autonomy and low revenue adjustability. While the city has a stable revenue base, consisting of taxes and transfers from the central government, it cannot adjust tax rates, limiting its ability to raise additional revenue during economic downturns. The city's expenditure is concentrated in non-cyclical sectors such as education, healthcare, and utilities, which helps stabilize spending during economic fluctuations. However, much of its spending is mandatory, leaving little room for flexibility in times of financial strain.
Almaty’s liquidity remains robust, supported by Kazakhstan’s strict debt regulations. The city can issue bonds due to its special status, unlike other local governments in Kazakhstan, which are limited to subsidized loans. However, the state imposes strict controls on cash reserves, limiting the city’s access to liquid assets.
Almaty’s financial profile is rated in the ‘aaa’ category, reflecting strong financial metrics. Fitch expects the city’s operating balance to stabilize over the coming years, driven by rising tax revenues and economic growth. Despite inflationary pressures, Almaty plans significant infrastructure investments, with projected capital expenditures averaging 734 billion Kazakh tenge ($1.4 billion) annually through 2028.