Fitch Upgrades Kazakhstan Currency Ratings on Improved Balance Sheet, Growth Prospects
Fitch Ratings upgraded Kazakhstan's investment-grade currency ratings by a notch to reflect the Central Asian country's improved balance sheet, low government debt levels and healthy growth prospects.
Fitch raised the rating to triple-B-plus--three notches into investment grade--and said the outlook is stable as it also cited the nation's steps toward overhauling its banking system.
The credit-rating firm said Kazakhstan is the second strongest sovereign net external creditor in the triple-B ratings category and No. 12 among rated sovereigns.
Sovereign assets in Kazakhstan's National Fund provide a growing cushion against economic shocks, Fitch said, while government debt is about 11% of gross domestic product.
Fitch expects Kazakhstan to have a budget surplus of about 3% of GDP next year, assuming average oil prices of about $100 a barrel. Even if oil prices drop below $80 a barrel, Fitch still expects the government to have a surplus.
According to Fitch, oil revenue accounts for half of government revenue and 70% of export revenue.
The strong balance sheet and growth prospects outweigh risks stemming from the nation's troubled financial sector, where troubled loans are among the highest of 50 emerging market systems for which Fitch collects data.
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