International rating agency S&P Global Ratings has raised Kazakhstan's sovereign credit rating from 'BBB-' to 'BBB' for the first time since 2016. The outlook is 'stable', reports infohub.kz.
The agency attributed the decision to the country's resilient economic prospects, ongoing diversification, and significant external and fiscal buffers.
S&P expects Kazakhstan's economy to continue growing in the medium term despite external risks and volatility in global commodity prices. Analysts project real GDP growth of 5.1% by 2026. Kazakhstan is also expected to maintain relatively high growth rates among oil-exporting countries.
S&P also highlighted a large-scale investment program aimed at developing raw materials processing and infrastructure. Financing projects through the national holding Baiterek is expected to help increase investment to 30% of GDP.
The agency believes that curbing budget spending growth and broadening the tax base will gradually reduce the budget deficit.
S&P also noted Kazakhstan's strong external position. Significant foreign exchange assets exceed moderate external debt, keeping the country a major external creditor.
The agency positively assessed the banking sector as well. Analysts say stronger regulation and supervision have increased banks' resilience to macroeconomic shocks and reduced systemic risks related to asset quality.
Previously, Kazakhstan's sovereign credit rating was at 'BBB-'.