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.
